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Legal Tender and consumer contract law

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  • NBLondon
    NBLondon Posts: 5,702 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    MobileSaver said:
    trusaiyan said:
    That raises the obvious question (and embarrassing contradiction) as to why the restaurant is permitted to reject the legal tender payment for the 'debt' in the restaurant if in a court setting it could not reject it as suitable payment?
    No, there's no contradiction (embarrassing or otherwise), a restaurant is free to offer only those payment options it wishes and a customer is free to choose one of those options or take their business elsewhere; if you believe this statement to be false then please provide a link to the statute that forces restaurants to accept a particular payment method...
    True - but trusiyan has a point....   If the restaurant (or other trader) wished to specify that they will not accept £50 notes then it is reasonable for the customer to expect this to be made clear before commencing the transaction by ordering a meal.    Yes - most of us know that not all will accept a £50 or that it may be difficult for them to take it if there is a lot of change required.   But it is still not unreasonable for the customer to expect that a valid Bank of England note is a valid offer of payment unless otherwise informed.  I wouldn't offer one for a £2.99 takeaway; but I have offered one for a £43 restaurant bill.  (Which was taken happily.)

    Remember when shops used to have stickers on the doors telling you which credit cards they took?  (Remember when M&S didn't take any at all???)   It wasn't then reasonable to assume that you could pay by card, so stores told you when you could.
    MobileSaver said:
    Your fundamental problem is, as @unholyangel's signature states, the words "legal tender" do not mean what you think they mean. There is no contradiction with the court accepting legal tender because that is literally the very definition of what legal tender is!

    This is why there is perhaps a case for a better legal term - or something like the French rule described above - including an element of reasonableness.
    I need to think of something new here...
  • trusaiyan
    trusaiyan Posts: 125 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    MobileSaver said:
    trusaiyan said:
    That raises the obvious question (and embarrassing contradiction) as to why the restaurant is permitted to reject the legal tender payment for the 'debt' in the restaurant if in a court setting it could not reject it as suitable payment?
    No, there's no contradiction (embarrassing or otherwise), a restaurant is free to offer only those payment options it wishes and a customer is free to choose one of those options or take their business elsewhere; if you believe this statement to be false then please provide a link to the statute that forces restaurants to accept a particular payment method...
    Your fundamental problem is, as @unholyangel's signature states, the words "legal tender" do not mean what you think they mean. There is no contradiction with the court accepting legal tender because that is literally the very definition of what legal tender is!
    As you are obviously having a problem understanding this basic premise perhaps you will believe the very people who make the "legal tender" that you wrongly believe businesses should be forced to accept?
    Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender

    You obviously can't understand the obvious and overwhelming contradiction, which I have highlighted multiple times but will again for those with reading comprehension problems.

    It doesn't make any sense whatsoever for the legal tender (cash) to be compulsorily accepted in a court setting to extinguish the debt, but NOT accepted to settle his debt or payment obligation in the restaurant. It should be mandatory that it would settle the debt in both, as there is no essential difference. If you can't see how that is a gross contradiction then I pity you.

    The contradiction is inherent in the UK's definition of legal tender as espoused by the Royal Mint's definition, which is a total embarrassment and the fact you, or anyone else, think it is morally right is worrying. We need urgent hard legal tender to force the acceptance of cash in all payment obligations, not just court settings. Yes, that's my political opinion that I'm sticking with. The vast majority of people who say in a shop, 'it's legal tender' do in fact think the concept means shops cannot reject cash, but our pathetic and immoral legal system permits it to do so.
    Disclaimer
    The information I post is for general informational purposes only and does not constitute legal, medical or professional advice of any kind. I accept no liability for the accuracy of the information reported.
  • Ditzy_Mitzy
    Ditzy_Mitzy Posts: 1,959 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 4 August 2020 at 5:36PM
    trusaiyan said:
    MobileSaver said:
    trusaiyan said:
    That raises the obvious question (and embarrassing contradiction) as to why the restaurant is permitted to reject the legal tender payment for the 'debt' in the restaurant if in a court setting it could not reject it as suitable payment?
    No, there's no contradiction (embarrassing or otherwise), a restaurant is free to offer only those payment options it wishes and a customer is free to choose one of those options or take their business elsewhere; if you believe this statement to be false then please provide a link to the statute that forces restaurants to accept a particular payment method...
    Your fundamental problem is, as @unholyangel's signature states, the words "legal tender" do not mean what you think they mean. There is no contradiction with the court accepting legal tender because that is literally the very definition of what legal tender is!
    As you are obviously having a problem understanding this basic premise perhaps you will believe the very people who make the "legal tender" that you wrongly believe businesses should be forced to accept?
    Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender

    You obviously can't understand the obvious and overwhelming contradiction, which I have highlighted multiple times but will again for those with reading comprehension problems.

    It doesn't make any sense whatsoever for the legal tender (cash) to be compulsorily accepted in a court setting to extinguish the debt, but NOT accepted to settle his debt or payment obligation in the restaurant. It should be mandatory that it would settle the debt in both, as there is no essential difference. If you can't see how that is a gross contradiction then I pity you.

    The contradiction is inherent in the UK's definition of legal tender as espoused by the Royal Mint's definition, which is a total embarrassment and the fact you, or anyone else, think it is morally right is worrying. We need urgent hard legal tender to force the acceptance of cash in all payment obligations, not just court settings. Yes, that's my political opinion that I'm sticking with. The vast majority of people who say in a shop, 'it's legal tender' do in fact think the concept means shops cannot reject cash, but our pathetic and immoral legal system permits it to do so.
    You need to contact your MP.  If you don't like the law, petition to have it changed - you're likely to be met with, either, total indifference or opposition.  I'd fall into the 'opposed' camp, just to let you know, as I see no benefit in meddling with a system that's functioned perfectly well for the past two hundred years.
  • powerful_Rogue
    powerful_Rogue Posts: 8,392 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    trusaiyan said:
    MobileSaver said:
    trusaiyan said:
    That raises the obvious question (and embarrassing contradiction) as to why the restaurant is permitted to reject the legal tender payment for the 'debt' in the restaurant if in a court setting it could not reject it as suitable payment?
    No, there's no contradiction (embarrassing or otherwise), a restaurant is free to offer only those payment options it wishes and a customer is free to choose one of those options or take their business elsewhere; if you believe this statement to be false then please provide a link to the statute that forces restaurants to accept a particular payment method...
    Your fundamental problem is, as @unholyangel's signature states, the words "legal tender" do not mean what you think they mean. There is no contradiction with the court accepting legal tender because that is literally the very definition of what legal tender is!
    As you are obviously having a problem understanding this basic premise perhaps you will believe the very people who make the "legal tender" that you wrongly believe businesses should be forced to accept?
    Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender

    You obviously can't understand the obvious and overwhelming contradiction, which I have highlighted multiple times but will again for those with reading comprehension problems.

    It doesn't make any sense whatsoever for the legal tender (cash) to be compulsorily accepted in a court setting to extinguish the debt, but NOT accepted to settle his debt or payment obligation in the restaurant. It should be mandatory that it would settle the debt in both, as there is no essential difference. If you can't see how that is a gross contradiction then I pity you.

    The contradiction is inherent in the UK's definition of legal tender as espoused by the Royal Mint's definition, which is a total embarrassment and the fact you, or anyone else, think it is morally right is worrying. We need urgent hard legal tender to force the acceptance of cash in all payment obligations, not just court settings. Yes, that's my political opinion that I'm sticking with. The vast majority of people who say in a shop, 'it's legal tender' do in fact think the concept means shops cannot reject cash, but our pathetic and immoral legal system permits it to do so.
    Let us all know how you get on with your MP regarding this matter.
    For me, never had an issue with it, 99.9% I will never have an issue with it.

  • trusaiyan
    trusaiyan Posts: 125 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    Ditzy_Mitzy said:
    trusaiyan said:
    Ditzy_Mitzy said:
    trusaiyan said:
    Ditzy_Mitzy said:
    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.
    So you are saying it IS true that if his unpaid meal 'debt' becomes a court awarded debt, he could tender the £50 note (which is legal tender) and it must extinguish/prevent him being sued for the debt (because of the legal tender law).

    That raises the obvious question (and embarrassing contradiction) as to why the restaurant is permitted to reject the legal tender payment for the 'debt' in the restaurant if in a court setting it could not reject it as suitable payment? That makes ZERO sense, but at the same time it does mean that the individual COULD ultimately pay for his debt in the legal tender he tendered in the restaurant if it could get to this stage (albeit with further court costs, but it could have been a £1000 meal in a fancy Soho restaurant...). Unless, as has already been posted, the bill is not considered a 'debt' in the eyes of the law at the point it is being paid in the restaurant.

    I still haven't seen a single link to a legal precedent, court judgement or Act of Parliament which establishes the laws as espoused by people in this thread, who are so convinced in their answers yet provide very little to back them up...
    But nobody's arguing with you - what you've described is contradictory and absurd.  I agree.  But you must surely understand that the law, like politics, religion and any other communal human activity, is full of contradictions and logical failings, fallacies and loop holes.  I'm sorry, but it's simply the best that we, as a species, can do.  If the law was perfect and made sense, there would be no need for lawyers and legislators.  It would be wonderful if we all agreed.  But I think in this case we sort of do - one man's legal tender is another's worthless bit of paper.
    If true, this needs to be legislatively corrected such that the legal tender concept applies where there is any payment obligation. There is no reason this ridiculous and unfair situation must exist, so I think we can do a lot better if I'm honest (other countries like France do fine with hard legal tender, you can pay in 100 and 200 euros in most places and those rejecting it are breaking the law).

    FWIW my friend has sent the enquiry to two separate lawyers, and is awaiting a response for a complete authoritative answer. I'll post it here once he receives it for anyone who wants to read it.
    The French example isn't quite as simple as you present.  Whilst there is a legal obligation for banknotes to be accepted, there are reasonableness criteria attached such as the ability for the payee to insist upon the exact amount being tendered, or refusing the transaction if he or she doesn't have sufficient change or, crucially, feels the face value of the note is disproportionate to the transaction value.  There's more about it here: https://www.banque-france.fr/en/banknotes/how-recognise-and-use-euro-banknotes-and-coins/where-under-what-conditions-and-how-much-can-i-pay-cash#:~:text=Genuine%20euro%20banknotes%20and%20coins%20are%20legal%20tender,and%20limits%20which%20vary%20from%20country%20to%20country.
    The principle isn't that different to here, in that someone in France attempting to pay for a 0.50 Euro pencil with a 200 Euro note can be turned away, much as the same person attempting to pay for a £0.50 pencil with a £50 note can here.  The key difference seems to be that someone in France is automatically entitled to purchase a 49.99 Euro CD player with a 50 Euro note, whereas someone in the UK isn't. 
    If you really think it's that much of an issue then your recourse is to the general public.  I can't see how you could do it via legal case as you, as a private individual, wouldn't have any particular reason to require any of the acts relating to bank notes to be amended.  You'd probably need a new act passed, let's call it the 'Legal Tender Act 2020'; it would have to pass through both houses and gain royal assent.  There needs to be some sort of public demand for it, firstly, for parliament to even think of the issue as one worth debating.  You might consider starting a petition or canvassing in your local area, then making a case to your MP if you are able to adequately evidence your claim that the public wants a new law.    
    The only question is 'why?'.  The majority of people aren't at all interested in cash these days and youngsters don't even carry it - I've had my purse commented on as if it's some mysterious remnant of a vanished civilisation.  Interest in extending the status of legal tender, therefore, is likely to be even smaller.
    I discussed previously in posts in this thread how there are exceptions in 'hard' legal tender countries, which are morally right, regarding still being able to reject cash payment, such as not having enough change (good faith principle) or suspecting fraud. So yes, in those circumstances cash could be rejected and these would be inherent in any country.

    I disagree though that there isn't an overall material difference to the way cash is accepted in society because of our law. I've been to France and other hard legal tender countries and cash is very rarely rejected, especially higher denominations. Over here, some denominations of legal tender and legal currency are carte blanch rejected with many shops having permanent policies against £50 notes, Scottish and Irish £20 notes, and now NO CASH shops altogether, which is illegal in hard legal tender countries. I therefore firmly would support the adoption of hard legal tender in the UK.

    Regarding the political effort to change it, the law is changed all the time, and there is no reason why it couldn't or shouldn't be changed here. 51% of people surveyed in the Access to Cash Review agreed it should be mandatorily accepted in shops, against 24% who were against, so it is strongly supported.
    Disclaimer
    The information I post is for general informational purposes only and does not constitute legal, medical or professional advice of any kind. I accept no liability for the accuracy of the information reported.
  • trusaiyan
    trusaiyan Posts: 125 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    Ditzy_Mitzy said:
    trusaiyan said:
    MobileSaver said:
    trusaiyan said:
    That raises the obvious question (and embarrassing contradiction) as to why the restaurant is permitted to reject the legal tender payment for the 'debt' in the restaurant if in a court setting it could not reject it as suitable payment?
    No, there's no contradiction (embarrassing or otherwise), a restaurant is free to offer only those payment options it wishes and a customer is free to choose one of those options or take their business elsewhere; if you believe this statement to be false then please provide a link to the statute that forces restaurants to accept a particular payment method...
    Your fundamental problem is, as @unholyangel's signature states, the words "legal tender" do not mean what you think they mean. There is no contradiction with the court accepting legal tender because that is literally the very definition of what legal tender is!
    As you are obviously having a problem understanding this basic premise perhaps you will believe the very people who make the "legal tender" that you wrongly believe businesses should be forced to accept?
    Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender

    You obviously can't understand the obvious and overwhelming contradiction, which I have highlighted multiple times but will again for those with reading comprehension problems.

    It doesn't make any sense whatsoever for the legal tender (cash) to be compulsorily accepted in a court setting to extinguish the debt, but NOT accepted to settle his debt or payment obligation in the restaurant. It should be mandatory that it would settle the debt in both, as there is no essential difference. If you can't see how that is a gross contradiction then I pity you.

    The contradiction is inherent in the UK's definition of legal tender as espoused by the Royal Mint's definition, which is a total embarrassment and the fact you, or anyone else, think it is morally right is worrying. We need urgent hard legal tender to force the acceptance of cash in all payment obligations, not just court settings. Yes, that's my political opinion that I'm sticking with. The vast majority of people who say in a shop, 'it's legal tender' do in fact think the concept means shops cannot reject cash, but our pathetic and immoral legal system permits it to do so.
    You need to contact your MP.  If you don't like the law, petition to have it changed - you're likely to be met with, either, total indifference or opposition.  I'd fall into the 'opposed' camp, just to let you know, as I see no benefit in meddling with a system that's functioned perfectly well for the past two hundred years.
    Well you have no idea what political activities I am involved with, and I am well aware of the challenges of getting the law changed, but I think it should be done.

    It's disappointing (but unsurprising) that some people who accept there is a contradiction and immoral arrangement, nevertheless would be against change to improve their own interests! That sounds awfully like turkeys voting for Christmas, but good luck ;)
    Disclaimer
    The information I post is for general informational purposes only and does not constitute legal, medical or professional advice of any kind. I accept no liability for the accuracy of the information reported.
  • powerful_Rogue
    powerful_Rogue Posts: 8,392 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    All this nonsense talking about law changing, immoral arrangements and turkeys voting for Christmas over a mate that tried to pay a bill with a £50 note.
    I can say, probably like a high majority of people that I have never received a £50 note. Cash machines don't issue them and they are pretty rarely used.
    As stated before, I have never had an issue like this, along with probably 99.5% of people. Set yourself up a government petition and see how it goes.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    We also look forward to reading both of the legal opinions you've instructed.
  • waamo
    waamo Posts: 10,298 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    What a fuss and palaver over a £50 note being accepted. Two solicitors opinions as well. Talk about overkill.


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