Legal Definitions - bearer

A bearer is the individual or entity who physically possesses a legal document, such as a financial instrument or a document of title, that is designed to be transferred simply by handing it over. This means the document either explicitly states it is "payable to bearer" or has been endorsed in a general way (known as "in blank"), making it payable to whoever holds it, rather than a specifically named person or organization.

Here are some examples to illustrate this concept:

• Example 1: A Check Payable to "Cash"

  Imagine someone writes a personal check and, instead of filling in a specific person's name in the "Pay to the Order of" line, they write the word "Cash." If you are the person who physically holds this check, you are the bearer. The bank will typically pay the amount of the check to you upon presentation, because the check is made payable to whoever possesses it.

• Example 2: An Old-Style Bearer Bond

  Historically, some government or corporate bonds were issued as "bearer bonds." These physical certificates did not list the owner's name. Instead, they had attached coupons that the holder would clip and present to receive interest payments. If you were holding such a bond certificate, you would be the bearer, entitled to collect the interest and the principal amount when the bond matured, simply by virtue of your possession.

• Example 3: A Bearer Warehouse Receipt

  Consider a business that stores a large shipment of goods in a commercial warehouse and receives a "bearer warehouse receipt." This document serves as proof of ownership and control over the stored goods. If the business then sells the goods and transfers the physical bearer warehouse receipt to the buyer, the buyer becomes the new bearer. The buyer, by simply possessing this receipt, now has the legal right to claim the goods from the warehouse.