Which term defines an endorsement passing title to a commercial paper but disclaiming liability of the indorser if the primary liable party fails to pay?

• A. Qualified Endorsement
• B. Restrictive Endorsement
• C. Journal
• D. Ledger

Answer: (A)

Endorsements on a negotiable instrument can transfer ownership while changing who bears the risk of nonpayment. The one that fits here is the endorsement that transfers title but explicitly says the endorser is not liable if the primary payer fails to meet the obligation. This is usually expressed as “without recourse.” In short, the endorser passes the instrument along but disclaims liability, so the subsequent holder can’t sue the endorser if the maker or drawee doesn’t pay.

This differs from a restrictive endorsement, which limits how the instrument may be used or further negotiated but doesn’t automatically relieve the endorser of liability. Journal and ledger are accounting terms unrelated to endorsements on negotiable instruments.