What are the Essentials of a Valid Indorsement?



1. Indorsement must be on the instrument:

It may be on the face or back of the instrument. In case there is no space left, then it may be on a slip of a paper called allonge. But assisgnment of a note by a separate writing is not indorsement.

2. It must be signed:

The indorsement must be signed for the purpose of negotiation. Mere signature without any additional words is sufficient. It should be noted that where the name of the indorsee is spelt wrongly, the signature must be done in the same spellings and correct spellings be given within brackets. If the additional words like 'assign' or "made over" etc. are used, intention of the parties is to be seen. An express promise in writing by indorser of a bill is not an indorsement.

3. Indorsement of an instrument is completed only by delivery by the indorser with the intention of passing the property in the instrument. The delivery may be actual or constructive. In case the delivery of an instrument is not given, the indorsement will not be effective. Delivery must be made by the indorser himself or by someone on his behalf, otherwise it will not be valid.


A executed a promissory note but before delivering it, he died. Held, his legal representative could not deliver the promissory note, so as to complete the instrument. Legal representative is not an agent of the deceased, as such, he cannot complete the delivery.

Who can make indorsement?

As a rule, only the parties to the negotiable instrument can make indorsement. A stranger, therefore, cannot make indorsement in our country. However, the English Bills Act recognizes a stranger and he will be liable as an indorser. Sec. 15 provides that when the maker or holder of the negotiable instrument signs the same, otherwise, than as such maker, for the purpose of negotiation on the back or face of the instrument or on a slip, he is said to indorse the instrument.

The following persons can make indorsement:

1. Thus maker or holder can indorse an instrument:

It should be noted in the case of maker that when he signs for the first time as a maker, he is not indorsing the instrument. It is only the second time, when he signs for the purpose of negotiation, he is said to make the endorsement.

2. In case the maker does not make the indorsement, the payee can make the first indorsement. Thereafter, any subsequent holder can indorse and negotiate the instrument.

3. Every maker, drawer, payee or indorsee can indorse.

4. In case of joint makers, drawers, payees or indorsers of the instrument, indorsement can be made by all or several joint makers, etc.

It should be noted that a payee or indorsee can indorse the instrument only if he is a holder, otherwise not.