Simple English definitions for legal terms
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A bearer instrument is a type of document or paper that can be transferred to another person simply by handing it over. It is payable to whoever holds it, rather than to a specific person. Examples of bearer instruments include bank bills, drafts, and certain types of commercial paper. Bearer instruments are different from order instruments, which are payable to a specific person or to anyone that person designates.
A bearer instrument is a type of document or instrument that is payable to the person who holds it, rather than to a specific person. This means that whoever physically possesses the instrument can claim the payment. Bearer instruments are negotiable, which means they can be transferred to another person simply by delivering the instrument to them.
These examples illustrate how bearer instruments work. The person who physically possesses the instrument is considered the owner and can use it to claim payment or transfer it to another person. This makes bearer instruments convenient for transactions where immediate payment is required and there is no need for formal registration or identification.