The endorsement of credit instruments

Abstract

Foreign exchange titles, in particular the bill of exchange and the promissory note, are normally intended to circulate and typically subject to the law on the movement of titles to the order, (they are titles to order by provision of law (arts 742 paragraph 1 and 802(a). These credit instruments – which historically constitute the model in which all titles were inspired by the order – are then titles by nominal legitimacy, as soon as the delivery of the document must be integrated with the subscription of the legitimized active cartular, usually on the back side of the document.

The movement of the securities to the order, and therefore the bill of exchange and the promissory note, occurs by endorsement. The endorsement is a written statement on the title with which its current holder (endorsement) orders the accepting release or issuer to pay the exchange sum to the subject to whom the title has been transferred (endorsement). It is usually placed on the back of the document or – if there is no space in it – in the so-called extension or extension sheet (Art 695) and transmits all rights resulting from the title (arts 741 paragraph 1 and 802 subparagraph (a)