B/L that is written (drawn) 'To Order' of the
consignee and is, therefore, a negotiable-instrument of
title.
Ownership of
goods covered under it can be transferred by one
party to another by
signature (endorsement) and
delivery of the B/L. Generally, goods which have not been paid-for in
advance (goods sent under an open-account or a letter-of-credit) are shipped under 'To Order' B/L which is of two types (1) To
Order,
Blank Endorsed: not consigned to any named party but 'To Order' of the
consignor, with the intended-consignee's name given under 'notify party.' The consignor must stamp and
sign (endorse) this B/L so that its title can be transferred.
(see blank endorsement). (2) To Order, Bank: consigned to a
bank with the intended consignee's name given under 'notify party.' The bank endorses the B/L to the intended consignee against
payment of (or a
pledge to pay) the
amount of the accompanying bill of exchange. 'To Order' B/Ls are used commonly in letter of credit transactions, and may be
bought, sold, or traded, or used as
security for borrowing
money from banks or other lenders.