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Warning
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Simple English definitions for legal terms
for account of
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A quick definition of for account of:
Term: FOR ACCOUNT OF
Definition: FOR ACCOUNT OF means that when someone writes a note or draft, they can add the name of the person who should get the money. This is called an indorsement. It tells the bank or whoever is giving the money who should receive it.
A more thorough explanation:
FOR ACCOUNT OF
FOR ACCOUNT OF is a type of endorsement on a note or draft that specifies the name of the person who is entitled to receive the payment.
Example 1: A company receives a check from a customer for payment of services rendered. The company endorses the check "FOR ACCOUNT OF John Smith" because John Smith is the employee who performed the services and is entitled to receive the payment.
Example 2: A person receives a dividend check from a stock they own jointly with their spouse. The person endorses the check "FOR ACCOUNT OF John and Jane Smith" because both spouses are entitled to receive the payment.
The examples illustrate how FOR ACCOUNT OF is used to specify the person or persons who are entitled to receive the payment. This type of endorsement is important for ensuring that the payment is received by the correct person or entity.