Legal Tender and consumer contract law

trusaiyan

Not quite sure this is the right thread but I can't find a more appropriate one.
I am asking this after a recent experience of a friend trying to pay with a £50 note in a restaurant after eating the meal and being rejected (without any suspicion of fraud). It raises some important legal questions that I don't think are fully answered on parts of the web.

I am aware that there is no 'hard' legal tender law in UK, meaning that retailers/shops/public bodies can reject cash that is deemed legal tender for normal retail transactions (it is not mandatorily accepted by law like in France, Denmark, State of Massachusetts etc, where it is illegal to recent cash where a payment obligation exists, as it should be in the UK but isn't.). 

However, is this true where in situations where you have eaten a restaurant meal or after a taxi ride (where there is surely a 'debt')?

According to the Bank of England: "Legal tender has a narrow technical meaning which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can’t sue you for failing to repay."

The questions are therefore:

1. In the scenario whereby a £50 note is refused by a restaurant to pay for the meal AFTER eating it (or having legal tender rejected AFTER a taxi journey), it is true or false that a debt exists in the same sense as outlined in legal tender law?
2. If it is true, is it therefore correct that you have extinguished the debt in the eyes of the law by offering legal tender (£50 note or the correct legal tender amount) regardless of whether the restaurant or taxi driver accepts the cash?
3. If it is false and it is not considered a 'debt' in the sense outlined in legal tender law, does that mean they are still regarded as instantaneous retail transactions (what is this payment obligation regarded as)?
4. If instantaneous retail transactions are NOT covered by legal tender law, is that because these types of transactions are not regarded as a 'debt' in the same sense of a debt outlined in the legal tender provisions (or is it for another reason)?
   
5. If they are not a debt, what type of payment obligation are they in the eyes of the law?

Any legal experts welcome, cheers

Browntoa

Regardless of your legal points there is no obligation for them to "legally" be compelled to accept either cash or in this case a £50 note . The same as them being able to refuse  to serve anybody they like 

Big chunk of small local shops and restaurants near me refuse to accept £50 

JJ_Egan

As above £50 notes are not something many want to handle . Fake then they are down fifty .

Reminds me to get rid of mine now we are on the electric card payment .

unholyangel

You are well and truly barking up the wrong tree. Legal tender refers to the payment of debt into court only. It has no bearing on a contract between two parties. 

ETA: Also, legal tender doesn't exist everywhere in the UK - there's no mechanism for legal tender in scots law/scotland. Even BoE notes aren't legal tender in scotland because of that. 

davidmcn

trusaiyan said:

 being rejected (without any suspicion of fraud)

I thought it was common knowledge that £50 notes are commonly not accepted because there's perceived to be a greater risk of forgery. If that wasn't the reason for the restaurant's policy, why was it rejected?

Grumpy_chap

Many establishments, including big chains, will not accept £50 notes because of the high number of forged notes in circulation.

Manxman_in_exile

Also, to qualify as "legal tender", don't you have to tender the exact amount due?  You can't demand change, so the OP's mate was probably lucky they didn't accept the 50 note.

https://www.royalmint.com/help/trm-faqs/legal-tender-amounts/

As to whether this is the correct board, I thought this had been covered several times on the Banking board?

Blackbeard_of_Perranporth

After this covid thing, who actually today uses cash?

trusaiyan

Yep, as I stated in my thread well aware retailers can reject any legal tender they please (which is fundamentally ridiculous and defeats the real object of having a legal tender in the first place, but that's a separate issue).

What I wasn't so sure on was whether a 'debt' exists as would be protected under the legal tender provision when you eat a restaurant meal or after the taxi journey and go to pay for that service AFTER using it or consuming it. If a debt does exist, I can't see why this is not protected by the provision that you could NOT be successfully sued for non-payment if you tendered to pay for the debt in legal tender?

unholyangel has answered this saying that it only concerns payment into court. Is it therefore true that the meal or taxi journey is NOT a debt? If not what is it?

unholyangel

The general reason places don't take higher denominations isn't because those notes have a higher risk of being forged, it's quite the opposite. It's lower denominations that tend to be forged because they attract less scrutiny. Even the £1 is more commonly forged than £50 notes. Some forgeries are so good, even the banks have trouble spotting them and circulate them. 

The higher risk is in them being able to identify a forgery, rather than the note actually being a forgery. People handle £10's & £20's all the time so are more likely to spot something wrong with one than they would a £50. 

trusaiyan

davidmcn said:

trusaiyan said:

 being rejected (without any suspicion of fraud)

I thought it was common knowledge that £50 notes are commonly not accepted because there's perceived to be a greater risk of forgery. If that wasn't the reason for the restaurant's policy, why was it rejected?

They claimed 'company policy', they didn't check the note or anything like that, just said they can't accept them. Although there was no sign stating they don't accept £50's (and from experience the vast majority of shops that do not accept them also do not put signs saying they don't).

Yes it will likely be for forgery reasons, they can't be bothered having to deal with the risk.