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Legal tender laws - an offer we can’t refuse - Open Knowledge — LiveJournal

Feb. 10th, 2008

05:28 am - Legal tender laws - an offer we can’t refuse

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You ever wonder what “legal tender” means? Wikipedia has a fascinating answer:

“…During the American Civil War, the federal government was unable to pay its debts with gold or silver coin, so began to issue paper notes to pay its debts, when people refused to accept them in payment, Congress adopted the Legal Tender Act of 1862, compelling them to do so. Thus forced to accept federal notes, the recipients wanted to be able to use them to pay their own debts, and this led to litigation. The United States Supreme Court, with the support of judges recently appointed by President Ulysses S Grant, held that paper money can be legal tender, in the Legal Tender Cases, ranging from 1871 to 1884.

The United States Coinage Act of 1965 states (in part):
“ United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts. ”

31 U.S.C. § 5103.

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor…”

Original: craschworks - comments

Comments:

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From:sweet_evil
Date:February 10th, 2008 02:10 pm (UTC)
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I generally agree when it comes to currency - but tender is also broader.

Legal tender is a condition precedent that activates another party's duty to perform. It is an offer to perform with a manifested and demonstrated ability to perform.

If you promise someone that you will give them your book, in exchange for their banana - You can tender by giving the book. Then they fall under the duty to give you the banana.

We just did that in class this week :)
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From:crasch
Date:February 10th, 2008 02:37 pm (UTC)
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Thanks for the clarification.
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From:sweet_evil
Date:February 10th, 2008 03:00 pm (UTC)
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Actually - I just realized my response needs one more clarification. They are only under the duty to give you the banana if they also had mutually joined the promise of the book for the banana :)
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From:cryo
Date:February 10th, 2008 07:28 pm (UTC)
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I want a banana.

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From:resipisco
Date:February 11th, 2008 04:42 am (UTC)
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Care to trade this book for it?
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From:sierra_nevada
Date:February 10th, 2008 06:14 pm (UTC)
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Because people have used these laws to pay their taxes in inconvenient ways (e.g. all in pennies), the Congress has since modified the law to prohibit that behavior.
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From:(Anonymous)
Date:February 11th, 2008 06:03 pm (UTC)
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I've always wondered if it was legal for some establishments to refuse to take certain bills (ie, 'No bills over $50'). That always seemed contrary to the 'Legal Tender' status of those bills. Can they really refuse a $50 if I owe them money?
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From:danlyke
Date:February 13th, 2008 10:21 pm (UTC)

Maybe

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Or maybe they can't be compelled to offer you change for that $50.
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From:coderay
Date:February 11th, 2008 06:09 pm (UTC)
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That anon post was mine, oops.
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