For of course this logic is not true
If a government declares a unit of account to be legal tender, it establishes the only means by which any claim in the economy can be legally enforced. No debt, no obligation, and no claim of any kind can be compelled to settlement except in that unit.
Conscription is not settled by some payment of folding stuff. Well, not often perhaps. Thereby refuting one of Spud’s axioms.
HMRC will take your Caravaggio in lieu of taxes owed too I believe.
Bastards!
Legal tender legal schmender.
It is only of use when paying the government.
Private individuals and firms can deal in anything they want, as long as the value is agreed: from Pokemon cards to gold doubloons.
The reserve currency for most basket case states is the US dollar, because the local currency is worthless. In the old Yugoslavia of the 90s, it was the Deutschemark.
And of course in prison the currency used to be cigarettes. Now its probably crack cocaine or something.
Or clutching your ankles.
Soap on a rope smuggling is big business.
While biting a pillow?
“Take two pillows into the shower?”
Pretty sure that the Courts can order goods or property to be seized in lieu of money to settle a debt…
Yes but isn’t that a case of then selling the goods to get money to settle the debt? If a lease company are owed money on a car they repossess the car, sell it and get their money. They don’t keep the car.
I suspect the court orders the sale. So it can be assessed for taxes.
You may want the car instead, but you would have to successfully bid on it.
No, they take the good to pay off the debt. The debt is done at that point. They will then sell off the good to get currency because that is more useful but it is a ln optional step.
What, even if the asset realises less cash than the debt due?
Yes. This is pretty common.
It’s also not unusual to see them keep any excess of the asset sells for more than the debt.
I refer the honourable Tuber to the section of Contract Law entitled “Specific Performance”.
“…no claim of any kind can be compelled to settlement except in that unit.”
OK then. I claim this is bollocks. Where’s my money?
Legally enforceable consideration doesn’t need to be in banknotes with pictures of King Charles on them, it can be literally a peppercorn. Contract law says you do indeed have the ability to secure claims even when the desired settlement is not monetary in nature, such as compelling the other party to perform services, or provide goods, as per the agreement.
Foolish Ritchie, is there no beginning to his knowledge?
I claim my pound of flesh.
For of course this logic is not true
It’s not his ‘logic’ or reasoning that is fault here. Rather, as you observe, his observation is empirically false.
“Legal tender” is something you can pay your taxes to the government in, and they have to accept it.
Well, not really. But if they don’t accept their own currency, what does it say about the government?
The government could make an exception for themselves as they make the rules. For everyone else, legal tender means that someone must accept legal tender currency as satisfaction for a debt. But even where what is offered is not legal tender – such as US Dollars or Euro – a court would take a very dim view of an arbitrary insistence on being paid in Sterling.
Obviously in the right circumstances legal tender is irrelevant. For example, there could be a contract to swap US dollars for Euro which would be perfecly enforceable without any legal tender issue getting involved.
Uhm, you can absolutely contract for payment in non-currencies. Complicated what you have to pay the taxman though.
Also, governments have not only been known to take alternate currencies, on occasion they won’t even take their own.
So that puts laid his assertion that governments make money by order.
I understand the people of Zimbabwe, and the government, prefer US dollars!!!
“No debt, no obligation, and no claim of any kind can be compelled to settlement except in that unit”
As usual, he’s got that arse about face.
Even his claim isn’t true. Here’s the Bank of England’s definition of legal tender:
If court action is taken to recover a monetary debt, and the debtor pays the amount of the debt* into court in legal tender, then the debt is regarded as settled. That’s all it means.
Also note that middle bit; you can contract for something else.
As others have pointed out, there are situations where a court judgement will enforce specific performance (an action rather than money), or enforce a settlement by transferring assets (typically land or shares).
But, more importantly, that definition is incredibly narrow, and it does not stop people agreeing between themselves to settle by (pretty much) any means they want. I haven’t looked at where he’s going with this argument, but I bet he’s making a claim about money that only works if you expand the definition of ‘legal tender’ beyond its actual meaning.
‘* see Miliangos v George Frank Ltd (1976) on converting foreign currency debts into legal tender; basically you use the exchange rate at the time of payment, not at the time the debt was incurred, so effectively the debt is enforced in the value of the foreign currency.