Negotiable Instruments Act Section 52 — Indorser who excludes his own liability or makes it conditional
CHAPTER IV OF NEGOTIATION
General
Summary
A person who endorses a negotiable instrument can write in the endorsement that they will not be held responsible for payment, or that their responsibility (or the next holder's right to get paid) depends on a specific event happening, even if that event never occurs. If such an endorser later comes back into possession of the instrument, then all the endorsers who signed in between become responsible to that person.
Official Text
The indorser of a negotiable instrument may, by express words in the indorsement, exclude his own liability thereon, or make such liability or the right of the indorsee to receive the amount due thereon depend upon the happening of a specified event, although such event may never happen. Where an indorser so excludes his liability and afterwards becomes the holder of the instrument, all intermediate indorsers are liable to him.