Bottomry Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Bottomry, written in plain English, along with examples of how it is used.
What is Bottomry?
(n) Bottomry is the contract of pledging the ship, vessel, freight etc as security for repayment of debts for machine, equipment, repair, lease of vessels etc
History and Meaning of Bearer Paper
Bearer Paper is a financial instrument that has existed for centuries, dating back to a time when currency was physical and had to be carried from one place to another. It is a type of negotiable instrument that can be transferred from one person to another simply by physically handing it over, without the need for endorsement or registration. Bearer Paper can either be in the form of currency, such as banknotes or checks, or in the form of commercial instruments, such as bonds or promissory notes.
The concept of Bearer Paper is based on the principle of ownership, where whoever holds the document is considered its owner and is entitled to all the rights and benefits specified in the document. This type of financial instrument was widely used in the past, but due to the increased risk of fraud and theft, it has been replaced by registered or dematerialized instruments in many countries.
Examples of Bearer Paper
A traveler's check is a type of Bearer Paper. A traveler's check can be cashed at a bank, but it can also be used as a form of payment without identification or a bank account.
A bearer bond is another example of Bearer Paper. The bondholder does not have to register their name with the bond issuer, and the bond can therefore be transferred easily and anonymously.
A postal money order is also a form of Bearer Paper. The sender of the money order hands it over to the recipient, who can then cash it at a post office or bank.
Legal Terms Similar to Bearer Paper
Negotiable Instrument - A legal document that guarantees payment to the holder of the document. This includes forms of Bearer Paper.
Registered Instrument - A financial instrument in which the owner's name is registered with the issuer, making it difficult to transfer ownership.
Dematerialized Securities - In electronic form, dematerialized securities eliminate the need for physical certificates and make it easier and quicker to transfer ownership.