Contract Glossary

Bearer

Definition

The person who physically holds a document, like a check, bond, or promissory note, that's payable to whoever has it, rather than to a named person. If a check says 'pay to bearer,' anyone holding that check can cash it.

In Practice

Bearer instruments are less common than they used to be (they're a security risk for obvious reasons), but you'll still encounter them in some financial agreements and international transactions. Bearer bonds were once popular because they offered anonymity, no name on the bond, no questions asked. Most countries have phased them out due to money laundering concerns.