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Legal Tender

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LEGAL TENDER. A legal tender is a fender of money of such description that the person to whom it is tendered will put him self in the wrong if he refuses to accept it. A legal tender requires that the exact sum of the debt must be tendered, without necessitating any change.

COINS.—The Coinage Act, 1S70 (33 Vict. c. 10,) Section 4, enacts " a tender of pay ment of money, if made in coins which have been issued by the Mint in accordance with the provisions of this Act, and have not been called in by any proclamation made in pursuance of this Act, and have not become diminished in weight, by wear or otherwise, so as to be of less weight than the current weight, that is to say, than the weight (if any) specified as the least current weight in the first schedule to this Act, or less than such weight as may be declared by any proclamation made in pursuance of this Act, shall be a legal tender, " In the case of gold coins for a payment of any amount : " In the case of silver coins for a payment of an amount not exceeding forty shil lings, but for no greater amount : " In the case of bronze coins for a payment of an amount not exceeding one shilling, but for no greater amount.

" Nothing in this Act shall prevent any paper currency, which under any Act or otherwise is a legal tender, from being a legal tender." By Section 5 :—" No piece of gold, silver, copper or bronze, or of any metal or mixed metal, of any value, shall be made or issued, except by the Mint as a coin or a token of money, or as purporting that the holder thereof is entitled to demand any value denoted thereon." By 24 and 25 Vict. c. 99, Section 7, " no tender of payment in money made in gold, silver, or copper coin, defaced by being stamped with any name or words thereon, whether such coin shall or shall not be thereby diminished or lightened, shall be allowed to be a legal tender." The gold coinage made at the mints of Sydney, Melbourne, and Perth (Western Australia) Naas declared legal tender in the United Kingdom by Royal Proclamation in the years 1866, 1869, and 1897 respectively.

Pre-Victorian sovereigns and half-sove reigns are not now legal tender. They were called in by the Coinage Act of 1889.

A creditor is not obliged to give change when notes are offered to a greater value than the amount of the debt.

NOTES.—By 3 4 Will. IV, c. 98, Section 6 :—" A tender of a note or notes of the Bank of England, expressed to be payable to bearer on demand, shall be a legal tender, to the amount expressed in such note or notes, and shall be taken to be valid as a tender to such amount for all sums above five pounds on all occasions on which any tender of money may be legally made, so long as the Bank of England shall continue to pay on demand their said notes in legal coin ; provided always, that no such note or notes shall be deemed a legal tender of payment by the governor and company of the Bank of England, or any branch bank of the said governor and company ; but the said governor and company are not to become liable or be required to pay and satisfy, at any branch bank of the said governor and company, any note or notes of the said governor and company not made specially payable at such branch bank but the governor and company shall be liable to pay and satisfy at the Bank of England in London all notes of the said governor and company or of any branch thereof."

Notes of the Bank of England may circu late in Scotland and in Ireland, but they are not a legal tender in those countries, if objected to by the person to whom they are being paid (8 & 9 Vict. c. 3S, Section 15 and c. 37, Section 6).

In the Isle of Man and the Channel Islands notes are not a legal tender.

It has been pointed out that, whereas a tender of a note is, by the above Act, not a legal tender for a debt of a debt of /5 Os. Id. can be legally discharged by a 1;5 note and a penny A tender of country bank notes, if not objected to by the person to whom they are offered, will act as a legal tender.

In the case of country bank notes which are accepted in payment at the time when a sale is made, the person who takes such notes takes them at his own risk and if he should find that the bank which issued the notes has failed he must suffer the loss him self. Unless he can prove that the person from whom the notes were received knew at the time of the sale that the bank had failed, the holder of the notes will not, in an ordinary case, have any remedy against that person. But the position is different when notes are received in settlement of a debt, as the debt will not be considered to have been paid if the person who takes the notes finds that the bank has failed and he is unable to obtain payment of them, He must, however, present the notes at the bank within a reasonable time and give due notice of their dishonour to the person from whom he received them, otherwise that per son will be discharged from liability. And the case is the same where change has been given for a bank note for the purpose of obliging a person.

Scotch notes are not legal tender in Scot land, neither are Irish notes legal tender in Ireland, except Bank of Ireland notes when used in payment of the Revenue of Ireland (1 8: 2 Geo. IV, c. 72).

When a banker cashes a cheque he does so in such notes or coins as may be desired by the customer, and it is not often that he has to consider in what form a payment should be made in order to constitute a legal tender. Except in the case of the Bank of England, a cheque for 1:50 may be cashed, in order to be a legal tender, as follows : It may all be in banknotes or in gold (sovereigns or half sovereigns) . or forty shillings may be in silver (or thirty-nine in silver and one in bronze), three pounds in gold and the remaining ,-;-15 either in gold or Bank of England notes.