Section 3: Transmission

A cheque made payable to a named person with or without an express “to order” clause is transferable by endorsement. A cheque payable to a named person with a “not to order” clause or an equivalent clause is transferable only in the form and with the effects of an ordinary assignment.

The endorsement may also be made for the benefit of the drawer or any other obligor. These persons may endorse the cheque again.

The endorsement must be pure and simple. Any condition to which it is subject is deemed unwritten. Partial endorsement is null and void. The endorsement of the drawee is also null and void. A bearer endorsement is equivalent to a blank endorsement. Endorsement to the drawee is only valid as a receipt, except in the case where the drawee has several establishments and the endorsement is made in favour of…

The endorsement must be written on the cheque or on a sheet of paper attached to it, known as an allonge. It must be signed by the endorser. The endorser’s signature is affixed either by hand or by any non-handwritten method. The endorsement may not name the beneficiary or may simply consist of the endorser’s signature, known as a blank endorsement. In the latter case, to be valid, the endorsement…

Endorsement transfers all rights arising from the cheque, in particular ownership of the funds. If the endorsement is blank, the bearer may: 1. fill in the blank, either with his or her name or with the name of another person ; 2. Endorse the cheque again in blank, or to another person; 3. give the cheque to a third party without filling in the blank or endorsing it.

Unless otherwise agreed, the endorser guarantees payment. The endorser may prohibit further endorsement; in this case, the endorser is not liable to any person to whom the cheque is subsequently endorsed.

The holder of an endorseable cheque is deemed to be a rightful bearer if he proves his right by an uninterrupted series of endorsements, even if the last endorsement is blank. Crossed-out endorsements are deemed to be unwritten. When a blank endorsement is followed by another endorsement, the signatory of the latter is deemed to have acquired the cheque through the blank endorsement.

An endorsement on a bearer cheque makes the endorser liable under the provisions governing recourse; moreover, it does not convert the instrument into a promissory cheque.

When a person has been dispossessed of a promissory cheque by any event whatsoever, the beneficiary who proves his right in the manner indicated in article L. 131-22 is only obliged to dispose of the cheque if he acquired it in bad faith or if, in acquiring it, he committed gross negligence.

Persons sued by virtue of the cheque may not raise against the bearer defences based on their personal relationship with the drawer or with previous bearers, unless the bearer, in acquiring the cheque, has acted knowingly to the detriment of the debtor.