Legal Definitions - cash

Cash refers to money in its most liquid and readily available forms. This typically includes physical currency suching as banknotes and coins, as well as funds held in bank accounts that can be accessed immediately, and negotiable instruments like checks that can be converted into physical money or bank funds without significant delay.

Here are some examples to illustrate the meaning of cash:

• Example 1: Physical Transaction

  A tourist purchases a souvenir from a street vendor and hands over a ten-dollar bill and some change. The vendor accepts these physical banknotes and coins as payment.

  Explanation: In this scenario, the ten-dollar bill and change represent physical currency, which is a direct and immediate form of cash used to complete a transaction.

• Example 2: Bank Account Funds

  A freelance graphic designer completes a project and receives an electronic payment directly deposited into their checking account. They then use their debit card to pay for office supplies online.

  Explanation: The funds held in the designer's checking account are considered cash because they are immediately accessible for spending, withdrawal, or electronic transfer, even though they are not in physical form.

• Example 3: Negotiable Instrument

  An insurance company issues a settlement payment to a policyholder in the form of a paper check. The policyholder takes the check to their bank and deposits it into their savings account.

  Explanation: The paper check, once deposited or cashed, converts into readily available funds in the policyholder's bank account. This makes the check a negotiable instrument that functions as a form of cash because it represents an immediate claim to money.