When I issue a business check to an individual, can I require that he endorse it by his signature?
Virginia statutes allow the use of a device or machine to make a signature on a negotiable instrument. It may be possible to create a private contract term with the party regarding manner of payment. Some organizations adopt their own policies regarding acceptable manners of payment that apply to those who do business with it. It is also possible to make a check payable to Party A and Party B, which would require both party's signatures in order to cash it.
The following are VA statutes:
§ 8.3A-401. Signature.
(a) A person is not liable on an instrument unless
(i) the person
signed the instrument, or
(ii) the person is represented by an agent or
representative who signed the instrument and the signature is binding on
the represented person under § 8.3A-402.
(b) A signature may be made
(i) manually or by means of a device or machine, and
(ii) by the use of
any name, including a trade or assumed name, or by a word, mark, or
symbol executed or adopted by a person with present intention to
authenticate a writing.
§ 8.3A-204. Indorsement. —
(a) "Indorsement" means a signature, other than that of a signer as
maker, drawer, or acceptor, that alone or accompanied by other words is
made on an instrument for the purpose of
(i) negotiating the instrument,
(ii) restricting payment of the instrument, or
(iii) incurring endorser's
liability on the instrument, but regardless of the intent of the signer,
a signature and its accompanying words is an indorsement unless the
accompanying words, terms of the instrument, place of the signature, or
other circumstances unambiguously indicate that the signature was made
for a purpose other than indorsement. For the purpose of determining
whether a signature is made on an instrument, a paper affixed to the
instrument is a part of the instrument.
(b) "Indorser" means a person who makes an indorsement.
(c) For the purpose of determining whether the transferee of an
instrument is a holder, an indorsement that transfers a security
interest in the instrument is effective as an unqualified indorsement of
(d) If an instrument is payable to a holder under a name that is not
the name of the holder, indorsement may be made by the holder in the
name stated in the instrument or in the holder's name or both, but
signature in both names may be required by a person paying or taking the
instrument for value or collection.
§ 8.3A-205. Special indorsement; blank indorsement; anomalous
(a) If an indorsement is made by the holder of an instrument, whether
payable to an identified person or payable to bearer, and the indorsement
identifies a person to whom it makes the instrument payable, it is a
"special indorsement." When specially indorsed, an instrument becomes
payable to the identified person and may be negotiated only by the
indorsement of that person. The principles stated in § 8.3A-110 apply
to special indorsements.
(b) If an indorsement is made by the holder of an instrument and it is
not a special indorsement, it is a "blank indorsement." When indorsed in
blank, an instrument becomes payable to bearer and may be negotiated by
transfer of possession alone until specially indorsed.
(c) The holder may convert a blank indorsement that consists only of a
signature into a special indorsement by writing, above the signature of the
endorser, words identifying the person to whom the instrument is made
(d) "Anomalous indorsement" means an indorsement made by a person who
is not the holder of the instrument. An anomalous indorsement does not
affect the manner in which the instrument may be negotiated.
§ 8.3A-206. Restrictive indorsement. —
(a) An indorsement limiting payment to a particular person or otherwise
prohibiting further transfer or negotiation of the instrument is not
effective to prevent further transfer or negotiation of the instrument.
(b) An indorsement stating a condition to the right of the indorsee to
receive payment does not affect the right of the indorsee to enforce the
instrument. A person paying the instrument or taking it for value or
collection may disregard the condition, and the rights and liabilities
of that person are not affected by whether the condition has been
(c) If an instrument bears an indorsement
(i) described in § 8.4-201
(ii) in blank or to a particular bank using the words "for
deposit," "for collection," or other words indicating a purpose of having
the instrument collected by a bank for the endorser or for a particular
account, the following rules apply:
(1) A person, other than a bank, who purchases the instrument when so
indorsed converts the instrument unless the amount paid for the
instrument is received by the endorser or applied consistently with the
(2) A depositary bank that purchases the instrument or takes it for
collection when so indorsed converts the instrument unless the amount
paid by the bank with respect to the instrument is received by the
endorser or applied consistently with the indorsement.
(3) A payor bank that is also the depositary bank or that takes the
instrument for immediate payment over the counter from a person other
than a collecting bank converts the instrument unless the proceeds of
the instrument are received by the endorser or applied consistently with
(4) Except as otherwise provided in paragraph (3), a payor bank or
intermediary bank may disregard the indorsement and is not liable if the
proceeds of the instrument are not received by the endorser or applied
consistently with the indorsement.
(d) Except for an indorsement covered by subsection (c), if an
instrument bears an indorsement using words to the effect that payment
is to be made to the indorsee as agent, trustee, or other fiduciary for
the benefit of the endorser or another person, the following rules
(1) Unless there is notice of breach of fiduciary duty as provided in
§ 8.3A-307, a person who purchases the instrument from the indorsee
or takes the instrument from the indorsee for collection or payment may
pay the proceeds of payment or the value given for the instrument to the
indorsee without regard to whether the indorsee violates a fiduciary
duty to the endorser.
(2) A subsequent transferee of the instrument or person who pays the
instrument is neither given notice nor otherwise affected by the
restriction in the indorsement unless the transferee or payor knows that
the fiduciary dealt with the instrument or its proceeds in breach of
(e) The presence on an instrument of an indorsement to which this
section applies does not prevent a purchaser of the instrument from
becoming a holder in due course of the instrument unless the purchaser
is a converter under subsection (c) or has notice or knowledge of breach
of fiduciary duty as stated in subsection (d).
(f) In an action to enforce the obligation of a party to pay the
instrument, the obligor has a defense if payment would violate an
indorsement to which this section applies and the payment is not
permitted by this section.