Legal Tender Laws

The dollar bills in the United States are marked, "This bill is legal tender for all debts, public and private." In other jurisdictions, the notes may not state this, but there will be some legislation identifying what specie are legal tender for various amounts.

What this means is that there are such laws as "legal tender" laws, which require you to accept currency notes as re-payment of debt. You cannot legally enforce a contract clause that says, "all debts are to be paid in gold..." because of the legal tender laws.

This does not necessarily mean, however, that a vendor must accept a payment for goods and services given in legal tender. A contract may specify payment for goods and services in any form acceptable to both parties.

What happens if one party doesn't pay for goods and services rendered by another? Doesn't this bring about a debt, which can then be legally settled using "legal tender"?

I doubt if one could sue for payment in a particular manner which is not legal tender, but it seems reasonable to insist on receiving a larger payment if it is made in a way originally agreed to involve such a charge (e.g., a fee for handling coins). Things get more complicated when someone refuses to accept payment because they want to recover possession of something instead of being paid for it (e.g., rented accommodation).

One, maybe the major, point of having legal tender seems to be that if someone lends you a sum of money, they should have to accept your offer of repayment of that sum with money. Remember the mayor in Jaws? The Mob wouldn't cash his cheque. Supposing that the Mob considered themselves bound by the law he should have been able to go to them in person with a suitcase full of fifties (and a notary to observe fair play) and demand that they accept this as settlement of the debt. I am not a lawyer, nor do I play one on television.

OTOH such nonsense as "minimum credit card order $15" is, I believe, a violation of the merchant's contract with the card company, but them I'm not a lawyer.

CategoryLegal