Legal Tender and consumer contract law

LilElvis

JJ_Egan said:

Anyone betting on a hundred page thread ??

I'll wager £50
You will accept a £50 note, won't you? 

trusaiyan

Ditzy_Mitzy said:

DoaM said:

Ditzy_Mitzy said:

Well, there's always the possibility of the restaurant owner issuing an invoice with payment terms to the diner.

Does an invoice have to include payment terms? If not then it can be argued that the bill presented after the service has completed is an invoice ... thus a debt exists rather than a "payment on the spot" situation.

/stirring the pot

I would argue that the bill isn't an invoice, as the situation remains one of payment on the spot until the point at which both parties agree that payment on the spot is not required.  The act notes that the payer knows payment on the spot 'is required or expected from him'; the social conventions of eating in a restaurant, it would be reasonable to argue, dictate that a diner pays on finishing his meal, therefore he should know that payment on the spot is required.
Separately, I see no reason why an invoice must include payment terms, but it would be silly for them to be omitted.  Doing so would give the recipient leave to argue that she'll pay it on the twelfth of never. 
/thank you for stirring the pot, the soup was delicious

Any case law or legal precedent or Act of Parliament to back it up that the bill 'isn't an invoice' in these circumstances (or that it wouldn't be regarded as a 'debt')?

Ditzy_Mitzy

trusaiyan said:

Takmon said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

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. 

Thanks for the response.
So if my friend refused to pay in another way because he tendered the exact amount of legal tender (which for the purposes of argument was exactly £50), could he be sued for non-payment of the restaurant meal 'debt' in court?

Yes.
Put it this way. Legal tender does not dictate what denominations a retailer has to accept. It just means that if you perhaps agreed to pay USD, then you can't successfully be sued for non-payment, if you offer to pay into court the debt in legal tender. Despite it not being what was originally agreed. 

There can be exceptions that to that though. Particularly with cross border disputes. 

But there now exists a 'debt' (I assume), so surely at this point in these types of transactions (not merely instant transactions over the counter, but where services have already been used) the legal tendered cash must extinguish the debt?

If he can't successfully be sued in court because he offered legal tender, then surely this is the same as extinguishing the debt?
I.e. he could walk away having attempted to pay for his debt in exact legal tender, and he could not be successfully sued in court for non-payment (because he offered the correct legal tender)?

In the alternative, if the debt remains after walking away but he is brought to court by the restaurant, he could then pay in the exact legal tender he originally offered, which must by law legally extinguish the debt whether the restaurant accepts the payment in court or not?

What extinguishes the debt is paying the debt. Having a defence to any action for non-payment (which would make you liable for costs incurred) is not the same as saying you don't have to pay the original sum. 

If what you propose was correct, we'd all be paying everything with £100 notes in the hope they refused so we'd get it free. 

In a nutshell, your friend should spend less time trying to get a free lunch by misapplying technical legal arguments he doesn't understand and more time sorting out payment. Whether that be by card, having to go to the atm or, if he genuinely has no other means of payment on him at the time, then he should leave his details and/or some sort of security so he can arrange to pay later. 

I was under the impression legal tender must extinguish the debt when offered correctly in court.

My friend paid for the meal by other means of course, so no one is trying to scam anyone at all (that's a ridiculous assertion).
He merely tried to pay in legally designated legal tender (£50 note) and was rejected AFTER the service, with no instruction or signage prior to the meal that £50 note would be rejected. Retailers and restaurants should clearly state the legal tender they won't accept on signage around the shop if they intend to not accept it (I have seen some shops do this with Scottish £20's).

£50 note has been designated by government as legal tender, so it isn't wrong for him to want to know his rights and where he stands when this is rejected. Money and cash are a fundamentally important aspect of our life and we appear to have a truly ridiculous system in the UK where we let businesses decide which parts of our legal tender they will accept (completely defeating the purpose of legal tender).

You must surely see the contradiction if what you have said is true: on the one hand retailers can refuse legal tender, but on the other hand you couldn't be successfully sued in court for non-payment if you tendered to pay off the debt in the correct legal tender. It therefore begs the obvious question: why would it not extinguish the debt at the point being tendered, if in a court situation it would in effect do just that?

According to the Bank of England: "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." I therefore fail to see how it does not in effect extinguish the debt by offering the legal tender, if it is not possible for him to be successfully sued for non-payment (unless it is NOT a debt in the eyes of the law). 

Interestingly, according to this opinion which is based on US law (so may not apply here and I don't know if these are legal experts so could be completely wrong), the meal would not be considered a 'debt' under the eyes of the law so wouldn't be protected by the legal tender principle which only protects debts (at least in the US). 

Responses to the parts in bold, in order:
1) I made no such assertion
2) You're still not understanding what legal tender actually is. It has no bearing on a contract between two parties. While they may not have stated they don't accept £50 notes (are they really supposed to give a list of everything they won't accept? that would be one hell of a long list and undoubtedly would still be non-exhaustive), the flip side of that argument is that neither did they state they would accept them. 
3) He doesn't have any - the only way he would have any rights is if they had stated they would accept £50 notes then, after the fact, tried to change their mind. 
4) See point 2.
5) There is no contradiction. You just don't understand the distinction. 


Try searching for "tender before claim defence" and that might hopefully help clear up your misunderstanding. Or look at the CPRs 37.2

 Legal tender should be the minimum they will accept for any payment obligation (whether instant retail payments or debts). 

Just imagine how stupid it would be if all online retailers had to accept cash as payment because it's legal tender because that's what your saying...

Oh yes the countries of Denmark, Norway, France, China, State of Massachusetts (and Spain I think, among many others), are completely stupid having a hard legal tender concept *facepalm*... it is only supported by 51% of the British public (compared with 24% opposed).

There could be an exception to online payments if it was deemed impractical, but in all other circumstances where there is any type of payment obligation, the business or institution accepting payment should 100% be forced to accept the legal tender (whether instant payments or a debt, and not just in a court setting). It prevents the ludicrous situation of businesses outright rejecting cash as they please, which they shouldn't be allowed to do (unless they suspect fraud after examining). 

I feel this has become a political argument, rather than anything to do with the law or the money system.  The bottom line is very simple: legal tender doesn't have to be accepted by anyone, but if it is offered to settle a court awarded debt and not accepted in lieu of that debt, the debtor can no longer be sued for non-payment.  
A restaurant meal is not a court awarded debt.  Restaurants, or anyone else for that matter, can refuse refuse or accept any sort of payment.

trusaiyan

Ditzy_Mitzy said:

trusaiyan said:

Takmon said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

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. 

Thanks for the response.
So if my friend refused to pay in another way because he tendered the exact amount of legal tender (which for the purposes of argument was exactly £50), could he be sued for non-payment of the restaurant meal 'debt' in court?

Yes.
Put it this way. Legal tender does not dictate what denominations a retailer has to accept. It just means that if you perhaps agreed to pay USD, then you can't successfully be sued for non-payment, if you offer to pay into court the debt in legal tender. Despite it not being what was originally agreed. 

There can be exceptions that to that though. Particularly with cross border disputes. 

But there now exists a 'debt' (I assume), so surely at this point in these types of transactions (not merely instant transactions over the counter, but where services have already been used) the legal tendered cash must extinguish the debt?

If he can't successfully be sued in court because he offered legal tender, then surely this is the same as extinguishing the debt?
I.e. he could walk away having attempted to pay for his debt in exact legal tender, and he could not be successfully sued in court for non-payment (because he offered the correct legal tender)?

In the alternative, if the debt remains after walking away but he is brought to court by the restaurant, he could then pay in the exact legal tender he originally offered, which must by law legally extinguish the debt whether the restaurant accepts the payment in court or not?

What extinguishes the debt is paying the debt. Having a defence to any action for non-payment (which would make you liable for costs incurred) is not the same as saying you don't have to pay the original sum. 

If what you propose was correct, we'd all be paying everything with £100 notes in the hope they refused so we'd get it free. 

In a nutshell, your friend should spend less time trying to get a free lunch by misapplying technical legal arguments he doesn't understand and more time sorting out payment. Whether that be by card, having to go to the atm or, if he genuinely has no other means of payment on him at the time, then he should leave his details and/or some sort of security so he can arrange to pay later. 

I was under the impression legal tender must extinguish the debt when offered correctly in court.

My friend paid for the meal by other means of course, so no one is trying to scam anyone at all (that's a ridiculous assertion).
He merely tried to pay in legally designated legal tender (£50 note) and was rejected AFTER the service, with no instruction or signage prior to the meal that £50 note would be rejected. Retailers and restaurants should clearly state the legal tender they won't accept on signage around the shop if they intend to not accept it (I have seen some shops do this with Scottish £20's).

£50 note has been designated by government as legal tender, so it isn't wrong for him to want to know his rights and where he stands when this is rejected. Money and cash are a fundamentally important aspect of our life and we appear to have a truly ridiculous system in the UK where we let businesses decide which parts of our legal tender they will accept (completely defeating the purpose of legal tender).

You must surely see the contradiction if what you have said is true: on the one hand retailers can refuse legal tender, but on the other hand you couldn't be successfully sued in court for non-payment if you tendered to pay off the debt in the correct legal tender. It therefore begs the obvious question: why would it not extinguish the debt at the point being tendered, if in a court situation it would in effect do just that?

According to the Bank of England: "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." I therefore fail to see how it does not in effect extinguish the debt by offering the legal tender, if it is not possible for him to be successfully sued for non-payment (unless it is NOT a debt in the eyes of the law). 

Interestingly, according to this opinion which is based on US law (so may not apply here and I don't know if these are legal experts so could be completely wrong), the meal would not be considered a 'debt' under the eyes of the law so wouldn't be protected by the legal tender principle which only protects debts (at least in the US). 

Responses to the parts in bold, in order:
1) I made no such assertion
2) You're still not understanding what legal tender actually is. It has no bearing on a contract between two parties. While they may not have stated they don't accept £50 notes (are they really supposed to give a list of everything they won't accept? that would be one hell of a long list and undoubtedly would still be non-exhaustive), the flip side of that argument is that neither did they state they would accept them. 
3) He doesn't have any - the only way he would have any rights is if they had stated they would accept £50 notes then, after the fact, tried to change their mind. 
4) See point 2.
5) There is no contradiction. You just don't understand the distinction. 


Try searching for "tender before claim defence" and that might hopefully help clear up your misunderstanding. Or look at the CPRs 37.2

 Legal tender should be the minimum they will accept for any payment obligation (whether instant retail payments or debts). 

Just imagine how stupid it would be if all online retailers had to accept cash as payment because it's legal tender because that's what your saying...

Oh yes the countries of Denmark, Norway, France, China, State of Massachusetts (and Spain I think, among many others), are completely stupid having a hard legal tender concept *facepalm*... it is only supported by 51% of the British public (compared with 24% opposed).

There could be an exception to online payments if it was deemed impractical, but in all other circumstances where there is any type of payment obligation, the business or institution accepting payment should 100% be forced to accept the legal tender (whether instant payments or a debt, and not just in a court setting). It prevents the ludicrous situation of businesses outright rejecting cash as they please, which they shouldn't be allowed to do (unless they suspect fraud after examining). 

I feel this has become a political argument, rather than anything to do with the law or the money system.  The bottom line is very simple: legal tender doesn't have to be accepted by anyone, but if it is offered to settle a court awarded debt and not accepted in lieu of that debt, the debtor can no longer be sued for non-payment.  
A restaurant meal is not a court awarded debt.  Restaurants, or anyone else for that matter, can refuse refuse or accept any sort of payment.

That is my political opinion in response to some comments, but the purpose of the thread was not to do that.

So why couldn't the unpaid restaurant meal turn into a 'court awarded debt' if it is unpaid and he is pursued by the restaurant for this debt in the courts?

Ditzy_Mitzy

trusaiyan said:

Ditzy_Mitzy said:

trusaiyan said:

Takmon said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

trusaiyan said:

unholyangel said:

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. 

Thanks for the response.
So if my friend refused to pay in another way because he tendered the exact amount of legal tender (which for the purposes of argument was exactly £50), could he be sued for non-payment of the restaurant meal 'debt' in court?

Yes.
Put it this way. Legal tender does not dictate what denominations a retailer has to accept. It just means that if you perhaps agreed to pay USD, then you can't successfully be sued for non-payment, if you offer to pay into court the debt in legal tender. Despite it not being what was originally agreed. 

There can be exceptions that to that though. Particularly with cross border disputes. 

But there now exists a 'debt' (I assume), so surely at this point in these types of transactions (not merely instant transactions over the counter, but where services have already been used) the legal tendered cash must extinguish the debt?

If he can't successfully be sued in court because he offered legal tender, then surely this is the same as extinguishing the debt?
I.e. he could walk away having attempted to pay for his debt in exact legal tender, and he could not be successfully sued in court for non-payment (because he offered the correct legal tender)?

In the alternative, if the debt remains after walking away but he is brought to court by the restaurant, he could then pay in the exact legal tender he originally offered, which must by law legally extinguish the debt whether the restaurant accepts the payment in court or not?

What extinguishes the debt is paying the debt. Having a defence to any action for non-payment (which would make you liable for costs incurred) is not the same as saying you don't have to pay the original sum. 

If what you propose was correct, we'd all be paying everything with £100 notes in the hope they refused so we'd get it free. 

In a nutshell, your friend should spend less time trying to get a free lunch by misapplying technical legal arguments he doesn't understand and more time sorting out payment. Whether that be by card, having to go to the atm or, if he genuinely has no other means of payment on him at the time, then he should leave his details and/or some sort of security so he can arrange to pay later. 

I was under the impression legal tender must extinguish the debt when offered correctly in court.

My friend paid for the meal by other means of course, so no one is trying to scam anyone at all (that's a ridiculous assertion).
He merely tried to pay in legally designated legal tender (£50 note) and was rejected AFTER the service, with no instruction or signage prior to the meal that £50 note would be rejected. Retailers and restaurants should clearly state the legal tender they won't accept on signage around the shop if they intend to not accept it (I have seen some shops do this with Scottish £20's).

£50 note has been designated by government as legal tender, so it isn't wrong for him to want to know his rights and where he stands when this is rejected. Money and cash are a fundamentally important aspect of our life and we appear to have a truly ridiculous system in the UK where we let businesses decide which parts of our legal tender they will accept (completely defeating the purpose of legal tender).

You must surely see the contradiction if what you have said is true: on the one hand retailers can refuse legal tender, but on the other hand you couldn't be successfully sued in court for non-payment if you tendered to pay off the debt in the correct legal tender. It therefore begs the obvious question: why would it not extinguish the debt at the point being tendered, if in a court situation it would in effect do just that?

According to the Bank of England: "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." I therefore fail to see how it does not in effect extinguish the debt by offering the legal tender, if it is not possible for him to be successfully sued for non-payment (unless it is NOT a debt in the eyes of the law). 

Interestingly, according to this opinion which is based on US law (so may not apply here and I don't know if these are legal experts so could be completely wrong), the meal would not be considered a 'debt' under the eyes of the law so wouldn't be protected by the legal tender principle which only protects debts (at least in the US). 

Responses to the parts in bold, in order:
1) I made no such assertion
2) You're still not understanding what legal tender actually is. It has no bearing on a contract between two parties. While they may not have stated they don't accept £50 notes (are they really supposed to give a list of everything they won't accept? that would be one hell of a long list and undoubtedly would still be non-exhaustive), the flip side of that argument is that neither did they state they would accept them. 
3) He doesn't have any - the only way he would have any rights is if they had stated they would accept £50 notes then, after the fact, tried to change their mind. 
4) See point 2.
5) There is no contradiction. You just don't understand the distinction. 


Try searching for "tender before claim defence" and that might hopefully help clear up your misunderstanding. Or look at the CPRs 37.2

 Legal tender should be the minimum they will accept for any payment obligation (whether instant retail payments or debts). 

Just imagine how stupid it would be if all online retailers had to accept cash as payment because it's legal tender because that's what your saying...

Oh yes the countries of Denmark, Norway, France, China, State of Massachusetts (and Spain I think, among many others), are completely stupid having a hard legal tender concept *facepalm*... it is only supported by 51% of the British public (compared with 24% opposed).

There could be an exception to online payments if it was deemed impractical, but in all other circumstances where there is any type of payment obligation, the business or institution accepting payment should 100% be forced to accept the legal tender (whether instant payments or a debt, and not just in a court setting). It prevents the ludicrous situation of businesses outright rejecting cash as they please, which they shouldn't be allowed to do (unless they suspect fraud after examining). 

I feel this has become a political argument, rather than anything to do with the law or the money system.  The bottom line is very simple: legal tender doesn't have to be accepted by anyone, but if it is offered to settle a court awarded debt and not accepted in lieu of that debt, the debtor can no longer be sued for non-payment.  
A restaurant meal is not a court awarded debt.  Restaurants, or anyone else for that matter, can refuse refuse or accept any sort of payment.

That is my political opinion in response to some comments, but the purpose of the thread was not to do that.

So why couldn't the unpaid restaurant meal turn into a 'court awarded debt' if it is unpaid and he is pursued by the restaurant for this debt in the courts?

There's absolutely no reason why the unpaid bill couldn't become court awarded debt, but in order to do so it would need to go through the courts first.  You might even be able to discharge the eventual debt using 'legal tender'; but there's rather a large risk, that of a prison sentence, if you really want to try it in order to prove the point.

Manxman_in_exile

LilElvis said:

JJ_Egan said:

Anyone betting on a hundred page thread ??

I'll wager £50
You will accept a £50 note, won't you? 

I'll act as impartial stakeholder for the two of you.

Manxman_in_exile

JJ_Egan said:

Anyone betting on a hundred page thread ??

I can't see it myself.  While trusiyan has the real dogged single-mindedness and complete failure of imagination that a 100 page thread demands, I don't think anyone else can see it through to the end (unless responses are made in a relay fashion).

unholy_angel already seems to have dropped out (who can blame her - you can only enjoy banging your head against a solid brick wall so much), and although Ditzy_Mitzy has come back with some tasty "bilking" references, I don't think she's got 100 page stamina.  I may be wrong of course... or the OP may decide to ask for the thread to be deleted... hopefully.

photome

JJ_Egan said:

Anyone betting on a hundred page thread ??

Looks like the OP is determined to get there.  Even thought most posts after unholyangels explanation have  been pointless

DoaM

photome said:

JJ_Egan said:

Anyone betting on a hundred page thread ??

Looks like the OP is determined to get there.  Even thought most posts after unholyangels explanation have  been pointless

You're welcome. Do I win a trophy? 😎

Spank

No, just a crisp £50