It’s a slip of paper affixed to a negotiable instrument, reminiscent of a promissory observe or invoice of alternate, to offer area for endorsements when the unique instrument lacks room. This attachment turns into a part of the unique doc and carries the identical authorized weight as endorsements positioned immediately on the instrument itself. For instance, if a promissory observe requires a number of transfers of possession, and the again of the observe is crammed with signatures, it permits for continued switch by way of subsequent endorsements.
This apply provides a vital profit by guaranteeing the continued negotiability of the underlying instrument. With out the power so as to add additional endorsements, the instrument would possibly turn out to be tough or inconceivable to switch, hindering its usefulness in industrial transactions. Traditionally, it enabled the environment friendly circulation of monetary devices, significantly in contexts the place transactions have been frequent and concerned a number of events. This facilitated commerce and commerce by offering a mechanism for transferring possession with out creating completely new paperwork for every transaction.
