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Simple English definitions for legal terms
order paper
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A quick definition of order paper:
An order paper is a type of written or printed document that can be used to pay a specific person or anyone that person chooses. It is different from bearer paper, which can be paid to whoever holds it. Commercial paper is a type of order paper that is used for business transactions, such as checks or certificates of deposit. Other types of order paper include accommodation paper, bankable paper, and commodity paper.
A more thorough explanation:
Definition: Order paper is a type of negotiable instrument that is payable to a specific person or to anyone that the payee designates.
For example, a check made out to John Smith is an order paper because it is payable only to John Smith. However, if the check is made out to "cash" or "bearer," it becomes a bearer paper because it is payable to whoever holds the check.
Order paper is different from bearer paper because it requires the endorsement of the payee to transfer ownership. This means that the payee must sign the back of the order paper to transfer it to someone else.
Order paper is commonly used in commercial transactions, such as when a company issues a check to pay for goods or services.