Question 1

If an endorser signs his name and adds the words "Sans Recourse", it means:

The instrument cannot be endorsed further.He assumes liability only if the primary debtor fails.He specifically excludes his own liability on the instrument to any subsequent holder.He waives his right to receive notice of dishonor.

View Explanation

"Sans Recourse" means "without recourse". By adding this, the endorser denies liability to any subsequent holder if the instrument is dishonored.

Question 2

An endorsement where the endorser signs his name and adds a direction to pay the amount to a specific person is called:

Blank EndorsementFull / Special EndorsementConditional EndorsementRestrictive Endorsement

View Explanation

A "Full" or "Special" endorsement specifies the person to whom or to whose order the money is to be paid (e.g., "Pay to B or Order" signed A). This converts a bearer instrument back into an order instrument, adding security.

Question 3

Endorsement "in blank" means:

The endorser signs his name without specifying the endorsee.The endorser prohibits further negotiation.The endorser specifies the person to whom payment is to be made.The endorser signs on a separate paper.

View Explanation

An endorsement in blank (just the signature) converts an Order instrument into a Bearer instrument, meaning it can now be transferred by mere delivery.

JAIIB Quiz

Quiz Finished!