No, we do not believe both payees need to endorse checks that do not contain an “and” between the payees’ names and are ambiguous as to whether they are payable to the payees alternatively. We also believe the checks may be deposited into an account belonging to only one of the payees.

The Illinois Uniform Commercial Code (UCC) provides that “if an instrument payable to 2 or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively.” Consequently, we believe a check made out to multiple payees that is ambiguous as to whether it is payable to the payees alternatively or jointly (i.e., the payees are listed without “and” or an ampersand appearing between their names) is payable to the payees alternatively and may be endorsed by either payee and deposited into either payee’s account.

For resources related to our guidance, please see:

• Illinois UCC, 810 ILCS 5/3-110(d) (“If an instrument is payable to 2 or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. If an instrument is payable to 2 or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them. If an instrument payable to 2 or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively.”)

• UCC Official Comments, Section 3-110, Comment 4 (“The third sentence of subsection (d) is directed to cases in which it is not clear whether an instrument is payable to multiple payees alternatively. In the case of ambiguity persons dealing with the instrument should be able to rely on the indorsement of a single payee. For example, an instrument payable to X and/or Y is treated like an instrument payable to X or Y.”)