legal tender

Legal Tender

Anything that a jurisdiction has declared to be money. Historically, legal tender currency has been based on something like gold or silver; however, most money is now fiat money. That is, fiat money is that which has been declared to be legal tender by a government and would not be regarded as such without government backing. Legal tender may be used to pay a debt. In general, a merchant who does not accept legal tender currency has the debt canceled; that is, one is required to accept the legal tender or nothing at all.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

legal tender

that part of a country's MONEY SUPPLY which, in the eyes of the law, is totally acceptable in discharge of a payment or debt. Coins and banknotes (CURRENCY) issued by the government fulfil this requirement. By contrast, a dealer or creditor is within his legal rights to refuse to accept as payment for a purchase or repayment of a debt a cheque drawn against a bank account.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

legal tender

that part of a country's MONEY SUPPLY that is, in the eyes of the law, totally acceptable in payment for a purchase of a good or service or repayment of a debt. CURRENCY (BANK NOTES and COINS) issued by the government fulfil this requirement. By contrast, a trader is within his legal rights to refuse to accept as payment a cheque drawn against a BANK DEPOSIT. See MINT.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005