I'm reading through Collectible American Coins by Kenneth Bressett. In the chapter on 2-, 3-, and 20-cent coins, he writes that some coins had a legal tender limit set by Act of Congress. For instance, the 2-cent coins had a legal tender limit of 20 cents from 1865 to 1873. What does this mean? Does this mean that no more than 10 2-cent coins (20 cents) could be used to pay someone? If so, was this a means to prompt them to circulate more widely, and how could it be enforced? It just seems sort of odd.
All it means is that no one could be compelled to accept more than the limit. The primary legal effect of something being designated as "legal tender" is that if offering it to pay a debt is a "tender". If the creditor refuses to accept it, the accrual of interest on the debt stops, and for purposes other than valuing the debt, it is the same as if it had been paid. For example, if someone proves in court that he has made a legal tender to a landlord who refused to accept it, the landlord would be unable to obtain an eviction judgment for non-payment. An offer of something else, such as a check or a credit card charge, would not prevent the eviction, because it wasn't a "tender" of payment. (Remember that, because there will be a test - about the 10th week of your first year law school contracts course. )
Interesting. Does this mean that if I paid for some 25-cent Chicklets I just ate in the check-out lane with 25 Lincoln cents, the merchant must accept it (or at least acknowledge I've, uh, "tendered"), but if I tried to use 30 Lincoln cents for the 30-cent TicTacs I just ate, he could demand I use some other coin combination or have me arrested for shoplifting?
Uh, not to my knowledge. It's perfectly legal to spend a large number of cents, but many merchants would want them rolled.
Under the Coinage Act of 1879, pennies (and nickels) are legal tender in amounts not exceeding twenty-five cents. Under the Coinage Act of 1965, this restriction was eliminated. So I was right forty-one years ago, but not lately. Story of my life. Incidently - US coins and currency are legal tender "for all debts". That means if I owe you money and I tender pennies, you have to take them. If you don't, you can't sue for non-payment and win. However - if I'm in business and put up a sign saying "No bills larger than a $20" or "No unrolled coin accepted", then I don't have to accept $50s or jars of pennies. "Legal tender" status applies to debts only.
True, but you don't HAVE to take it. And although you can'r claim that they didn't try and pay you, it does not erase the debt. They still owe you the original debt, but you can't add any interests or penalties.
I hate the IRS as much as the next guy but I heard a rumor of some knuckle-head paying off the IRS in pennies to make some kind of point (what- I'll never know) but was made to sit and watch the agent count out the change. moral: he who accepts legal tender laughs last...I guess Maybe I'll check SNOPES. Seems a bit urban legendified!
