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Simple English definitions for legal terms
proceeds
Read a random definition: prematurity
A quick definition of proceeds:
Proceeds: The money you get when you sell something like land, goods, or investments. It can also mean the things you get when you sell or exchange something that was used as collateral for a loan. For example, if a farmer borrows money and gives the creditor a security interest in the harvest, the harvested wheat is collateral. If the farmer then exchanges the harvest for a tractor, the tractor becomes the proceeds of the wheat. Net proceeds means the amount of money you get after you subtract the costs of the transaction like expenses and commissions.
A more thorough explanation:
Definition: The amount of money received from selling something, such as land, goods, or investments. It can also refer to something received upon selling, exchanging, collecting, or otherwise disposing of collateral.
Examples:
- After selling his car, John received $10,000 in proceeds.
- The proceeds from the sale of the house will be used to pay off the mortgage.
- If a farmer borrows money and gives the creditor a security interest in the harvest, the harvested wheat is collateral. If the farmer then exchanges the harvest for a tractor, the tractor becomes the proceeds of the wheat.
The examples illustrate that proceeds refer to the amount of money received from selling something or the value received upon disposing of collateral. In the case of the farmer, the wheat was collateral, but when it was exchanged for a tractor, the tractor became the proceeds of the wheat.