§ 3201 Negotiation Of Instruments

• •Negotiation means giving a check or similar paper to someone else, whether you want to or not.
• •If the check has a specific person's name on it, you need that person's signature to give it to someone else.
• •If the check says 'pay to the holder' or something like that, you can just give it to someone else without a signature.

You find a check on the ground made out to 'John Doe'.

You can't just give that check to your friend and expect them to cash it. John Doe has to sign the back of the check first. If the check just said 'pay to the holder', then you could give it to your friend without any signature.