When a holder makes a blank indorsement of a negotiable instrument that is bearer paper,what legal effect does this have?
A)There is no effect-bearer paper does not need to be indorsed.
B)The bearer negotiates it by transfer alone and no further indorsement is necessary for negotiation.
C)The instrument is no longer negotiable,as it has been altered.
D)The instrument is converted into order paper.

Question

Quizplus · Accepted Answer

An instrument indorsed in blank is payable to the bearer (person in possession of it)and from that act is "bearer paper." As such,the bearer negotiates it by transfer alone and no further indorsement is necessary for negotiation.

When a Holder Makes a Blank Indorsement of a Negotiable