Redeem Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Redeem, written in plain English, along with examples of how it is used.
What is Redeem?
(v) Redeem is the act by which a property, article, right etc sold, issued, mortgaged or otherwise transferred to a person is taken back by re-purchasing, clearing the liabilities or paying the consideration etc.
History and Meaning of Redeem
Redeem is a term that has its roots in the Latin word "redimere" which means "to buy back". The concept of redeeming dates back centuries, and in the financial world, it is commonly used to refer to the process of buying back something that was previously sold or mortgaged. It can also refer to the clearing of a debt or the payment of a consideration. Redeeming a property or article involves taking it back by purchasing it back, or by clearing the liabilities on it, or by paying a consideration to reclaim it.
Examples of Redeem
- A company may redeem their outstanding bonds by paying the bondholders the face value of the bonds, plus any interest due at the time of redemption.
- A person may redeem their own property by paying off the mortgage on it to the bank, which then releases the liens and gives them fully ownership of the property.
- A gift card holder can redeem the card by using it to purchase products or services from the issuing retailer.
- A bank may allow a customer to redeem their loyalty points for cashback or gift cards.
- A mutual fund investor can redeem their shares by selling them back to the fund at their net asset value.
Legal Terms Similar to Redeem
- Repurchase - an agreement between the seller and the buyer, under which the seller agrees to buy back the same asset or property, which he had previously sold to the buyer.
- Release - the act of relinquishing one's legal rights or claims over a property or asset.
- Foreclosure - the legal process through which a lender reclaims a mortgaged property after a borrower fails to meet the payment obligations according to the loan agreement.