Question
nnnnBlank, special, restrictive, and qualified are all terms used to specify types of:
nnnnSelections
nnnnA. Liens
nnnnB. Leases
nnnnC. Contracts
nnnnD. Endorsements
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Answer: D
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5 Keys Summary
nnnn• Blank, special, restrictive, and qualified are all terms used to classify the types of Endorsements.
nnnn• Endorsements are the methods by which a negotiable instrument (such as a promissory note or check) is transferred from one party to another.
nnnn• A qualified endorsement typically includes the phrase “without recourse” to protect the endorser from liability if the instrument later defaults or is unpaid.
nnnn• A restrictive endorsement limits the use of the instrument, such as by specifying “For deposit only,” restricting its free transferability.
nnnn• A special endorsement specifies the new payee, using a phrase like “pay to the order of (a named transferee),” directing the transfer of the negotiable instrument.
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