Legal Tender Definition in Your Own Words
In the People`s Republic of China, the official renminbi currency is unlimited legal tender for all transactions. The law requires that a public entity or individual cannot refuse to use money to settle a public or private domestic debt. [23] Legal tender in each country is the generally accepted currency in all its denominations, which is used to settle economic transactions on the open market. The forms in which this offer is submitted and accepted may vary depending on the laws of each country, but the concept is essentially the same everywhere. In many cases, the legal system, as part of its due process, imposes an obligation on a party to perform a previously agreed financial obligation. The term “legal tender” comes from the Middle French tendre (verbal form), which means “to offer”. The Latin root is tender (stretching), and the meaning of tender as an offer is related to the etymology of the English word “extend” (hold outwards). [5] The 1¢ and 2¢ coins were withdrawn from circulation as of February 1992, but are still legal tender. [15] Banknotes are not legal tender in Scotland. [42] Scottish banknotes are legal tender but are not legal tender anywhere in the United Kingdom. [43] U.S. coins and currencies (including Federal Reserve notes and circulation bank notes of Federal Reserve banks and national banks) are legal tender for all debts, public duties, taxes, and duties.
Foreign gold or silver coins are not legal tender for debts. The opposite of demonetization is remonetization, in which a form of payment is re-established as legal tender. Singapore and Brunei Darussalam have had a currency swap agreement since 12 June 1967. Under the terms of the agreement, Singapore dollars and Brunei dollars can be exchanged for free at face value in both countries. Thus, the currency of one country is accepted as a “usual tender” in the other country. [31] The Decimal Currency Act 1970 regulated legal tender before the introduction of the euro and established the corresponding provisions as in British law (all of which were taken from the previous British law), namely: coins over 10 pence have become legal tender for payments not exceeding £10, Coins not exceeding 10 pence were legal tender for payments not exceeding £5. and the bronze coins were legal tender for a payment not exceeding 20 pence. When the Iraqi Swiss dinar ceased to be legal tender in Iraq, it was still circulating in the northern Kurdish regions and had a stable market value for more than a decade despite the lack of state support.
This example is often cited to show that the value of a currency is not derived solely from its legal status (but that this currency would not be legal tender). Demonetization is the act of stripping a monetary unit of its legal tender. It occurs whenever the national currency changes: the current form(s) of currency are withdrawn from circulation and withdrawn, often to be replaced by new notes or coins. Sometimes a country completely replaces the old currency with a new currency. Legal tender refers to all U.S. coins and currencies issued by the government. U.S. cash dollars are also valid forms of legal tender. Nevertheless, federal laws do not require a seller to accept cash as legal tender for payment for goods or services that have been provided.
This allows companies to establish their own policies on accepting cash as legal tender. Legal tender also includes Federal Reserve notes as well as bank notes from Federal Reserve banks and national banking associations for the purpose of settling public and private debts, duties, fees and taxes. Legal tender generally does not include personal checks, credit cards or other general forms of non-cash payments. In some cases, foreign currency may be accepted as legal tender. In addition, legal tender can only be used in connection with the repayment of debts. Sometimes monetary issues such as commemorative coins or transfer slips may be issued that are not intended for public circulation, but are still legal tender. An example of such a currency is the Maundy currency. Some currency issuers, notably Scottish banks, issue special commemorative notes for normal circulation (although no Scottish or Northern Irish notes are legal tender in the United Kingdom). In addition, some standard coins are minted on higher-value dies as “non-circulating” versions of the coin, which collectors can purchase for an additional fee.
These documents are nevertheless legal tender. Some countries issue precious metal coins on which a monetary value is indicated well below the value of the metal containing the coin: these coins are called “non-circulating legal tender” or “NCLT”. The Supreme Court finally intervened and ended legal segregation in the landmark 1954 decision, Brown v. School Board. This indemnity must be paid within the following 15 working days using legal tender. The money will be transferred by bank transfer to Mr. Carl`s bank account. The Norwegian krone (NOK) is legal tender in Norway according to the Central Bank (Norwegian: Sentralbankloven) of 24 May 1985. [30] However, no one is obliged to accept more than 25 coins of each denomination (of which 1, 5, 10 and 20 NOK denominations are currently in circulation).