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Definition of 'Endorsement'

An endorsement is a written statement that authorizes someone to act on your behalf. It can be used to give someone permission to cash a check, sign a contract, or make a withdrawal from your bank account.

There are two types of endorsements: blank and special. A blank endorsement is the simplest type of endorsement and simply consists of your signature on the back of the document. This gives the endorsee the right to cash the check or take any other action they want with the document.

A special endorsement is more specific and limits the endorsee's actions. For example, you could write "Pay to the order of John Smith" on the back of a check. This would allow John Smith to cash the check, but no one else.

You can also use a restrictive endorsement to prevent someone from cashing a check. For example, you could write "For deposit only" on the back of a check. This would prevent anyone from cashing the check, but it could be deposited into a bank account.

It's important to use endorsements carefully and only when you're sure you want to give someone permission to act on your behalf. If you're not sure what type of endorsement to use, it's best to consult with a financial advisor.

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