When the holder fails to endorse order paper but does physically transfer the paper to a third party, the transferee is considered an assignee not a holder.

Name: When the holder fails to endorse order paper but does physically transfer the paper to a third party, the transferee is considered an assignee not a holder.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

In the absence of endorsement, the transferee does not become a holder in due course but rather an assignee, as they do not have the rights of a holder without the proper endorsement.

When the Holder Fails to Endorse Order Paper but Does