Qualified Indorsement Law and Legal Definition

Qualified indorsement refers to an indorsement that passes title to the instrument but limits the indorser’s liability to later holders if the instrument is later dishonored. Usually, qualified indorsement is made by writing without recourse or without recourse over the signature. A qualified indorsement constitutes the indorser a mere assignor of the title of the instrument, although such an indorsement does not impair the negotiable character of the instrument. In Fecko v. Tarczynski, 281 Mich. 590 (Mich. 1937), it was held that in a qualified indorsement whereby indorser merely transfers such right, title and interest in a note as s/he may be effected by adding to his/her signature the words "without recourse" or any words of similar import.