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According to the Bank of England website 'The concept of legal tender is often misunderstood. Contrary to popular opinion, legal tender is not a means of payment that must be accepted by the parties to a transaction, but rather a legally defined means of payment that should not be refused by a creditor in satisfaction of a debt. The current series of Bank of England notes are legal tender in England and Wales, although not in Scotland or Northern Ireland, where the only currency carrying legal tender status for unlimited amounts is the one and two pound coins.' Anne, Blairninich UK http://www.guardian.co.uk/notesandqu...-19878,00.html
Australian definition of legal tender: http://www.alecomm.com/index.php?opt...issues-generalhttp://www.bankofengland.co.uk/bankn...rnireland.aspx
From http://www.bankofengland.co.uk/bankn...t/faqs.aspx#16
What is legal tender?
The coins issued under the authority of Section 6 of The Coinage Act, 1906, shall be legal tender in payment or on account i.e. provided that a coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its case: - [Section 13 of The Coinage Act, 1906].
Similarly, the One Rupee notes issued under the Currency Ordinance, 1940 are also legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act, 1934.
Every banknote issued by Reserve Bank of India (Rs.2, Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000) shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government, subject to provisions of sub-section (2) Section 26 of RBI Act, 1934. The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to end banknote issues of Private and Presidency Banks. Government of India continued to issue currency notes till the Reserve Bank of India (RBI) was established on 1st April, 1935.
What is the meaning of "I promise to pay" clause?
As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote. This is payable on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.
The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that the banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange a banknote for coins of an equivalent amount. http://www.rbi.org.in/scripts/FAQView.aspx?Id=39#11
You will find a Promissory Clause in all the banknotes. What exactly is this? This means that as per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay you the value of a banknote. This is payable to you on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote to you does not arise out of a contract but out of statutory provisions.
The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that your banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange your banknote for coins of an equivalent amount.
Italy Centesimi http://www.ebay.com/ctg/Italy-10-Cen...866-/102020413
The Currency Act. The colonies suffered a constant shortage of currency with which to conduct trade. There were no gold or silver mines and currency could only be obtained through trade as regulated by Great Britain. Many of the colonies felt no alternative to printing their own paper money in the form of Bills of Credit. The notes were issued by land banks, or loan offices, which based the value of mortgaged land.
There was no standard value common to all of the colonies. British merchant-creditors were very uncomfortable with this system, not only because of the obvious complexity, but because of the rapid depreciation of the notes due to regular fluctuations in the colonial economy.
On September 1, 1764, Parliament passed the Currency Act, effectively assuming control of the colonial currency system. The act prohibited the issue of any new bills and the reissue of existing currency. Another provision of the Currency Act established what amounted to a "superior" Vice-admiralty court, at the call of Navel [sic] commanders. http://www.ushistory.org/declaration...urrencyact.htm
The South African Reserve Bank is the reserve bank of the Republic of South Africa. Its functions include the formulating and implementing of South Africa's monetary policy, ensuring the efficiency of South Africa's financial system and educating South Africa's citizens about the monetary and economic situation of the country. Unlike the reserve banks of most commonwealth nations, the South African Reserve Bank has always been privately owned. http://www.investopedia.com/terms/s/...serve-bank.asp
Putting It All Together http://www.investopedia.com/articles...ntralbanks.asp
According to the Bank of England website 'The concept of legal tender is often misunderstood. Contrary to popular opinion, legal tender is not a means of payment that must be accepted by the parties to a transaction, but rather a legally defined means of payment that should not be refused by a creditor in satisfaction of a debt. The current series of Bank of England notes are legal tender in England and Wales, although not in Scotland or Northern Ireland, where the only currency carrying legal tender status for unlimited amounts is the one and two pound coins.' Anne, Blairninich UK http://www.guardian.co.uk/notesandqu...-19878,00.html
Australian definition of legal tender: http://www.alecomm.com/index.php?opt...issues-generalhttp://www.bankofengland.co.uk/bankn...rnireland.aspx
From http://www.bankofengland.co.uk/bankn...t/faqs.aspx#16
What is legal tender?
The coins issued under the authority of Section 6 of The Coinage Act, 1906, shall be legal tender in payment or on account i.e. provided that a coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its case: - [Section 13 of The Coinage Act, 1906].
Similarly, the One Rupee notes issued under the Currency Ordinance, 1940 are also legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act, 1934.
Every banknote issued by Reserve Bank of India (Rs.2, Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000) shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government, subject to provisions of sub-section (2) Section 26 of RBI Act, 1934. The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to end banknote issues of Private and Presidency Banks. Government of India continued to issue currency notes till the Reserve Bank of India (RBI) was established on 1st April, 1935.
What is the meaning of "I promise to pay" clause?
As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote. This is payable on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.
The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that the banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange a banknote for coins of an equivalent amount. http://www.rbi.org.in/scripts/FAQView.aspx?Id=39#11
You will find a Promissory Clause in all the banknotes. What exactly is this? This means that as per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay you the value of a banknote. This is payable to you on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote to you does not arise out of a contract but out of statutory provisions.
The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that your banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange your banknote for coins of an equivalent amount.
Italy Centesimi http://www.ebay.com/ctg/Italy-10-Cen...866-/102020413
The Currency Act. The colonies suffered a constant shortage of currency with which to conduct trade. There were no gold or silver mines and currency could only be obtained through trade as regulated by Great Britain. Many of the colonies felt no alternative to printing their own paper money in the form of Bills of Credit. The notes were issued by land banks, or loan offices, which based the value of mortgaged land.
There was no standard value common to all of the colonies. British merchant-creditors were very uncomfortable with this system, not only because of the obvious complexity, but because of the rapid depreciation of the notes due to regular fluctuations in the colonial economy.
On September 1, 1764, Parliament passed the Currency Act, effectively assuming control of the colonial currency system. The act prohibited the issue of any new bills and the reissue of existing currency. Another provision of the Currency Act established what amounted to a "superior" Vice-admiralty court, at the call of Navel [sic] commanders. http://www.ushistory.org/declaration...urrencyact.htm
The South African Reserve Bank is the reserve bank of the Republic of South Africa. Its functions include the formulating and implementing of South Africa's monetary policy, ensuring the efficiency of South Africa's financial system and educating South Africa's citizens about the monetary and economic situation of the country. Unlike the reserve banks of most commonwealth nations, the South African Reserve Bank has always been privately owned. http://www.investopedia.com/terms/s/...serve-bank.asp
Putting It All Together http://www.investopedia.com/articles...ntralbanks.asp
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