Legal Definitions - clearing

Definition: Clearing refers to the process of exchanging checks and balancing accounts in banking. In maritime law, it refers to the departure of a ship from port after complying with customs, health laws, and other local regulations.

• When you deposit a check into your bank account, the bank will go through a clearing process to ensure that the check is valid and that the funds are available before crediting your account.
• Before a ship can leave port, it must go through a clearing process to comply with customs, health laws, and other regulations. Once the ship has been cleared, it is allowed to depart.

These examples illustrate how clearing is a process that ensures that everything is in order before proceeding. In banking, clearing helps to prevent fraud and ensure that funds are available before they are credited to an account. In maritime law, clearing helps to ensure that ships comply with regulations and are safe to depart from port.