DEFINITION of 'Pay To Order'

A check or draft that must be paid via endorsement and delivery. Pay-to-order instruments are negotiable checks or drafts that are generally written as "pay to X or order." These instruments stand in contrast to pay-to-bearer instruments, which do not require endorsement.

BREAKING DOWN 'Pay To Order'

The Uniform Commercial Code outlines the rules pertaining to pay-to-order instruments. It specifies that ownership of this type of check can be transferred only via endorsement – someone who accepts a check must endorse it before transferring it somewhere else.

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