Endorsement Effect

Marketing economy is a credit economy. The typical feature of economic activities on credit is that risks exist at any moment. Because of the need of avoiding risks, instruments became popular when commercial credit appeared in the form of contract which could fix rights and liabilities between creditors and debtors. Instrument can negotiable among parties concerned through indorsement. As the times of indorsement increase, credit of negotiable instruments also accumulates so that commercial credit develops further. The mature instruments market plays a significant role in regulating the social credit actions and promoting the establishment of credit system, especially when the credit relationships are in disorder and the social credit system is not complete at present in our country.The first part of this article discloses the features of indorsement through the analysis of the definition and nature of indorsement . Because Chinese legal system is more like Roman Law Legal System, the second part in the first place gives a detailed introduction of classification of indorsement in countries that belong to Roman Law Legal System and then a brief introduction of classification of indorsement in countries that belong to Common Law Legal System emphasizing the different kinds of indorsement from Roman Law countries. The third part lays the basis for discussion of effect of restrictive indorsement after the analysis of effect of general indorsement. The fourth part and the fifth part analyze the effect of restrictive indorsement and non-negotiable indorsement . The last part analyze the effect of compound indorsement that has already appeared in commercial activities.