It’s a slip of paper affixed to a negotiable instrument, corresponding to a promissory notice or invoice of alternate, to offer house 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 notice requires a number of transfers of possession, and the again of the notice is crammed with signatures, it permits for continued switch by way of subsequent endorsements.
This apply affords an important 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 into tough or unimaginable to switch, hindering its usefulness in industrial transactions. Traditionally, it enabled the environment friendly circulation of monetary devices, notably in contexts the place transactions had been frequent and concerned a number of events. This facilitated commerce and commerce by offering a mechanism for transferring possession with out creating totally new paperwork for every transaction.
