A bill of exchange must be transferred to circulate, and there are two ways to transfer it: delivery and endorsement. Endorsement refers to a subsidiary bill behavior in which the holder transfers certain or all bill rights to others, records relevant matters and signs on the back of the bill or on the attachment, and then delivers the bill to the endorsee (transferee). The scope of application of endorsement is wider than delivery. The transfer of registered bills and order bills must be carried out by endorsement, while the delivery method is only applicable to the transfer of bearer bills. The Geneva Uniform Bills of Exchange Law and my country’s Bills of Exchange Law do not recognize the validity of bearer bills of exchange, so endorsement becomes the only way to transfer bills of exchange.
Endorsement can be continued for many times, and the endorsee can make another endorsement, so that the holder can continue to transfer a bill of exchange, thereby realizing the circulation of the bill of exchange.
Endorsement is mainly for the purpose of transferring bill rights, but sometimes the endorser also uses endorsement for other purposes. Therefore, endorsement can be divided into two categories: transfer endorsement and non-transfer endorsement.
Transfer endorsement is an endorsement for the purpose of transferring the rights of the bill. Most of the endorsements usually mentioned belong to this type. Transfer endorsement, also known as regular endorsement or inherent endorsement, can be divided into general transfer endorsement and special transfer endorsement. If the bill is fully effective in transferring the rights after endorsement and is not subject to any restrictions, it is a general transfer endorsement, which is the most common type of endorsement, including full endorsement and blank endorsement. If the rights transfer effect and rights guarantee effect of the bill are restricted after endorsement, it is a special transfer endorsement, including restrictive endorsement, conditional endorsement and collection endorsement.