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Legal Love Me Tender

Debunked: In the United States, a creditor or seller is legally required to accept payment in any valid federally-issued currency, even a bag of pennies.

"Legal tender, for all debts public and private," does not mean that a merchant, a creditor, or anyone else has to accept payment in coins. As the FAQ for the United States Department of the Treasury states, "all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal law mandating that a person or organization must accept currency or coins as for payment for goods and/or services." Courts that have confronted such arguments have agreed. _See,_ _e.g.,_ _Ohio v. Carroll,_ Civ. Act. No. 96-2236, 1997 WL 118064 (Ohio App. 4 Dist., Mar. 13, 1997)

In short, you can't extinguish a debt by offering to pay it in pennies. Depending upon the law of any given jurisdiction, and upon the terms of any prior agreement between the creditor and the debtor, the offer of payment in pennies (or any other "nuisance" form), may stop the running of interest on the debt. _See,_ _e.g.,_ _Dooley v. Smith,_ 80 U.S. 604, 20 L.Ed. 547, 13 Wall. 604 (1871) (holding a tender in payment thereof in United States notes was valid, and stopped the running of interest); Uniform Commercial Code section 3-604 (though under other provisions of the UCC, tender in coins may be considered "unreasonable").

On the other hand, there is no over-arching federal law *limiting* a debtor's ability to offer payment in any desired combination of coins (though the creditor doesn't have to _accept_ payment in that form). However, certain individual governmental entities can, like any other creditor, set their own requirements. Such restrictions can be adopted by rule, regulation or ordinance.

For example, in February 1993, the Village of Glen Ellyn, Illinois, adopted an ordinance that restricted payment of fines or other village obligations by coins: No more than 24 pennies, 24 nickels or 9 dimes could be used. (The Village ordinance also banned payment "with currency or coin which has been soiled, contaminated, tainted or polluted with any human or animal bodily secretions such as but not limited to blood, urine, semen, feces, mucus, spit or other human or animal wasts ...") _See_ Eric Zorn, "Something rotten in paying of fines," _Chicago Tribune,_ February 18, 1993 at 1 (Chicagoland Section)

By comparison, the Currency Act of Canada, codified at R.S.C. 1985, c. C-52, s. 8, provides that payment in coins is "legal tender" for only certain amounts in certain dominations.

True: There are legal (but not all-inclusive federal) limits in the United States on how much of your debts you can pay in coins ... depending on where you are, and what debt you want to pay.

True: ...For some strange reason, Canadian law is much clearer on this topic.

References:

• United States Department of the Treasury FAQ
• Title 31, Section 5103 of the United States Code
• Currency Act of Canada