Search for a definition or browse our legal glossaries. (Examples & Definition) Restrictive Endorsements via endorsement of a check. Restrictive endorsement is one which either by express words restricts or prohibits the further negotiation of a bill or which expresses that it is not a complete and unconditional transfer of the instrument but is a mere authority to the endorsee to deal with bill as directed by such endorsement. An endorsement signed on the back of a check, note, or bill of exchange that restricts to whom the paper may be transferred -- for example, "for transfer only to Frank Lowry." Published under license with Merriam-Webster, Incorporated. Restrictive endorsement. Accord and Satisfaction - how it creates an agreement. For Deposit Only—Restrictive Endorsement. Also spelled "indorsement." Merriam-Webster, Incorporated. restrictive endorsement Primary tabs. Restrictive endorsements may be contained in a letter or note that accompanies a check. Restrictive indorsement (a) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument. 11-3-206 (2010) 11-3-206. Source: Merriam-Webster's Dictionary of Law ©1996. If you are a creditor, you now have more latitude in your ability to cash checks that are tendered for less than the amount owed. restrictive endorsement — An endorsement that restricts the negotiability of a document. Simply using a memo, restrictive endorsement, or cover letter will not do the trick. A restrictive endorsement limits the use of a financial instrument (usually a check). Restrictive Endorsement restrictive endorsement see endorsement. Restrictive Indorsement. restrictive endorsement — An endorsement on a bill of exchange that restricts the freedom of the endorsee to negotiate it … Big dictionary of business and management. An endorsement signature on the back of a check that specifies the conditions under which the check can be transferred or paid out. Most Popular Terms: This seems to indicate that the credit union's name should be listed in the indorsement to meet the definition of a "restrictive indorsement" under the UCC. (n) Restrict endorsement is the restriction made in a financial instrument whereby its free transferability is restricted to a specific person noted in that endorsement. Restrictive endorsements are made by signing at the reverse of the instrument by noting the limitations effected there in. § 11-3-206 - Restrictive indorsement O.C.G.A. The result of a restrictive endorsement is that a financial instrument is no longer a negotiable instrument that can be passed from the stated payee to a third party. Definition from Nolo’s Plain-English Law Dictionary. A restrictive endorsement is a way of paying an account in a strategic way to improve your credit rating. UCC Codes. Should an association receive a check with a restrictive endorsement, it essentially has two options: 1) reject the check and continue collecting on the amount due; or 2) cash the check and run the risk of being held to the terms of the endorsement. Safe Harbor - The creditor's protection from settlements. For example, the model UCC defines a restrictive indorsement as "an indorsement limiting payment to a particular person…" and bears a signature. The endorsement area is typically about 1.5” long and covers the breadth of the check. The most secure way to endorse a check is to: Write: “For Deposit Only to Account Number XXXXXXXXXX” Sign your name below that, but still within the endorsement … The act of a payee or other holder of an instrument, such as a check, that consists of signing his or her name upon the back of the instrument in order to transfer it to another and wording the signature in such a manner as to bar the further negotiability of the instrument. 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