"THIS NOTE IS LEGAL TENDER
FOR ALL DEBTS, PUBLIC AND PRIVATE"
Does this really mean you are required to accept it if offered? Does a person or entity not have the right to specify terms of payment in order for an offer to be accepted?
I think there are good business reasons why cash may not be accepted. For example, a small-time internet business (say a baseball card dealer) who only wants payment through Pay-pal, so as to make the accounting and banking relationship simpler. To have to make trips to a bank is time consuming and not useful, so just require Paypal, for example.
I think because a currency is labeled as legal tender, doesn't mean the recipient is forced to accept it to settle a debt. I have heard of people trying to settle large debts in pennies, and having their efforts rebuffed, so I would think the same principle applies for currency in general. Perhaps we have a lawyer in the group who could address this thought.
I think Shoeshineboy makes a great point. You want to be able to take advantage of the efficiencies offered by technology, without excluding others who are unable to take advantage for one reason or another. But that being said, as a user of the Dulles Toll Road on a daily basis, I do get aggravated by the "coin" people. Over 75% of toll road users have the EZ Pass or whatever it's called, including myself. But the remaining 25% are persistent causers of delays, we all have to wait for them to scratch together their coins or bills and wait for change due to their failure to just adopt the simple program. Do not tell me that 25% of the people are too poor to have a credit card, especially in the Northern Virginia area around the Dulles Toll Road.
At some point folks should realize that their obstinancy in resisting new technologies comes at a cost to the rest of us. Inefficiencies, costs, slowdowns will persist as the slow adopters cling to their outmoded tactics. The trick is try to minimize the impact to ready adopters of the new ways of doing things. In the end I don't really care if some people pay cash at the toll booth, as long as I don't have to wait behind them.
OK, so I talked to my boyfriend who is a lawyer. He says it's first semester law school contracts, and yes, the parties to a contract can set whatever method of payment they want. As long as the payment method isn't itself prohibited by law, (like payment in the form of endentured servitude--slavery--or sex or something like that), the method of payment can be cash, debit card, credit card, personal check, or some kind of loan or financing like a promissory note on a car, a mortgage on a house, whatever.
US currency says that it is "legal tender." Clearly, this doesn't mean that it MUST be used in ALL transactions. We know that from every day life, because everyday we pay for goods or services with a check, or credit card, whatever. It just means that legally it is ONE kind of payment method.
It also doesn't mean that a merchant MUST accept cash as payment, even where a contract clearly sets out a different kind of payment method. As a practical matter though, most merchants do accept cash, and probably prefer it, because it is really immediate payment, as opposed to a check, which has to clear banks, or a credit card, which also has to clear through banks.
By third year of law school, you get to a class on "commercial paper." This is kind of the law of checks, and other payment systems. But these are also legally recognized by most states as legal methods of payment. Most states have passed something called the Uniform Commercial Code (or UCC), which makes the law of checks pretty standard from state to state.
Any currency is really just a symbol. It's symbolic of a guarantee made by the government that issued it. That guarantee is really a just a promise that the currency itself is worth something. And those promises are tied to politics, economic stability, that kind of thing. So that's why the value of currency fluctuates, and why some forms are more stable than others.
Anyway (my boyfriend likes to ramble), the answer to the question is that the parties to a contract can agree a particular method of payment if they want.
