Legal tender

Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt.[1] Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in payment of a debt extinguishes the debt. There is no obligation on the creditor to accept the tendered payment, but the act of tendering the payment in legal tender discharges the debt.

Some jurisdictions allow contract law to overrule the status of legal tender, allowing (for example) merchants to specify that they will not accept cash payments.[2] Coins and banknotes are usually defined as legal tender in many countries, but personal cheques, credit cards, and similar non-cash methods of payment are usually not. Some jurisdictions may include a specific foreign currency as legal tender, at times as its exclusive legal tender or concurrently with its domestic currency. Some jurisdictions may forbid or restrict payment made by other than legal tender.[citation needed] In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (where the obligation to pay may arise at the same time as the offer of payment). For example, vending machines and transport staff do not have to accept the largest denomination of banknote. Shopkeepers may reject large banknotes, which is covered by the legal concept known as invitation to treat.[clarification needed]

The right, in many jurisdictions, of a trader to refuse to do business with any person means that a would-be purchaser may not force a purchase merely by presenting legal tender, as legal tender must only be accepted for debts already incurred.


Share this article:

This article uses material from the Wikipedia article Legal tender, and is written by contributors. Text is available under a CC BY-SA 4.0 International License; additional terms may apply. Images, videos and audio are available under their respective licenses.