What is the term for an endorsement that restricts the use of an instrument to only the stated purpose?

The correct term for an endorsement that limits the use of an instrument to only the stated purpose is a restrictive endorsement. This type of endorsement specifies that the instrument (such as a check) can only be used in a manner that is explicitly mentioned. For example, if a check is endorsed with instructions stating it can only be deposited into a specific account, that endorsement is considered restrictive. The intent behind a restrictive endorsement is to enhance security and reduce the risk of misuse or fraudulent activities, ensuring that the instrument can only be processed in a particular way.

In contrast, a conditional endorsement would involve terms that create conditions for its validity, which differs from the specificity of a restrictive endorsement. A blank endorsement, on the other hand, allows the instrument to be negotiated by anyone holding it, thus providing no restrictions at all. A special endorsement typically names a specific person to whom the instrument is payable, which also does not carry the restrictive conditions associated with the correct answer.