What is the term for the signature on the back of an instrument along with any directions or limitations?

The term for the signature on the back of an instrument, along with any accompanying directions or limitations, is endorsement. An endorsement signifies the transfer of ownership or a right to another party and may include instructions about how the instrument should be handled or utilized. This process is commonly used in financial instruments, such as checks or promissory notes, where the endorser conveys rights to the endorsed party.

The function of an endorsement is critical because it legally authorizes the transaction outlined in the instrument and makes it enforceable. It also indicates that the endorser supports or agrees with the transaction being conducted. In contrast, the other terms listed do not specifically refer to the act of signing an instrument in this manner. For instance, indorsement is often considered synonymous with endorsement but can refer to specific contexts or variations in usage that are less common. Authorization generally relates to granting permission for an action but does not specifically refer to a signature on a document, while validation implies a process of confirming the legitimacy or correctness, not the signature mechanism itself.