Discount

——In Contracts. Interest reserved from the amount lent at the time of making a loan. An allowance sometimes made for prompt payment. As a verb, it is used to denote the act of giving money for a bill of exchange or promissory note, deducting the interest. The taking legal interest in advance is not usurious; but it is only allowed for the benefit of trade, and where the bill or note discounted is meant for circulation, and is for a short term.

2 Cow. (N. Y.) 678, 712; 3 Wend. (N. Y.) 408.

There is a difference between "buying" a bill and "discounting" it. The former word is used when the seller does not indorse the bill, and is not accountable for its payment.

See Poth. de I'Usure, note 128; 3 Pet. (U. S.) 40; Blydenburgh, Usury; Sewell, Banking.

In Practice. A set-ofl or defalcation in an action. Viner, Abr.