Qualified indorsement (or endorsement) is an indorsement that passes title to a negotiable instrument with certain restrictions. It is an indorsement coupled with an additional phrase, e.g. "without recourse," thereby limiting the liability of the indorser (signer) to subsequent holders of the instrument in the event the instrument is dishonored. The idea is that the indorser is transferring any rights they have in the instrument, but they are not warranting that the payor of the instrument will honor it. While a qualified indorsement makes it more difficult for a thief or embezzler to cash an instrument, it does not affect or limit the ability to further transfer or negotiate the instrument.
[Last updated in May of 2022 by the Wex Definitions Team]
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