Mantra Oil Inc. indorses a check "Pay Habib Coal Corp. only if it delivers 1,000 tons of coal by September 30, 2014." Under Revised Article 3 of the Uniform Commercial Code, this is a _____ indorsement.

Question

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There are two kinds of indorsements that the original Article 3 treated as restrictive indorsements, but that the Revised Article 3 of the Uniform Commercial Code no longer considers restrictive indorsements. One such indorsement is conditional indorsement, which indicates that it is effective only if the payee satisfies a certain condition. The given example illustrates a conditional endorsement because Mantra Oil Inc. indicates in its indorsement that Habib Coal Corp. should be paid only if it delivers 1,000 tons of coal by September 30, 2014.