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Negotiating Checks Payable to Multiple Parties

Answered by: 
Barbara Hurst

Question: 
A check payable to customer A - B ( it does not have the word "and/or" between the two names ) I have always been told that when it does not have the "and/or" that it is accepted as "OR" that either customer A or B could cash or deposit the check.
Answer: 

The revised Uniform Commercial Code is very specific. It says if the word "and" appears between names, then it must be endorsed by all. If the word "and" does not appear, it is considered to be payable to any one of the payees, and must be endorsed only by one. Take care, though, that you do not disregard the insurance checks/drafts that say on the back they MUST be endorsed by all payees in order to be negotiable. (You can link to this (Section 3-110(d) or any other section of the UCC through the BankersOnline.com Launch Pad.)

First published on BankersOnline.com 5/7/01

First published on 05/07/2001

Filed under: 
Operations
Filed under operations as: 
Checks
IT
UCC

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