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Legal tender

In a retail sale and under any other contract (unless the contract provides otherwise), the seller must accept payment if it is "tendered" (i.e. offered) in money which is classified as “legal tender”.

Legal tender is as follows (see Coinage Act 1971 s.2 and Currency and Bank Notes Act 1954 s.1):
(a)  Coins of cupro-nickel or silver of denominations of more than 10 pence, for payment of any amount not exceeding £10.
(b)  Coins of cupro-nickel or silver of denominations of not more than 10 pence, for payment of any amount not exceeding £5.
(c)  Coins of bronze, for payment of any amount not exceeding 20 pence.
(d)  Bank notes of any denomination issued by the Bank of England are legal tender in England and Wales[ but not strictly according to the statute (since the abolition of £1 notes) in Northern Ireland and Scotland] (Currency and Bank Notes Act 1954).

Northern Irish and Scottish banknotes
There are no bank notes having the status of legal tender in Scotland or Northern Ireland. However certain banks may lawfully issue notes in these jurisdictions: in Scotland they are the Bank of Scotland, Clydesdale Bank plc and the Royal Bank of Scotland plc; in Northern Ireland notes issued by the Bank of Ireland, First Trust Bank Ltd, National Bank Ltd, Northern Bank Ltd and Ulster Bank Ltd.
Originally in the Bank Notes (Scotland) Act 1845 and Bankers (Northern Ireland) Acts 1845 and 1928, the law is now contained in the Scottish and Northern Ireland Banknote Regulations 2009 and the Scottish and Northern Ireland Banknote Rules 2011).

Legaleze comment: “legal tender” has a narrow technical meaning which designates a method of payment which a creditor must accept if tendered by the debtor. “Legal currency” indicates money which is lawfully issued. Understandably there is much misunderstanding and confusion about this subject. UK law is typically quirky and illogical in this area.
The legal position is that there are no bank notes having legal tender in Scotland and Northern Ireland, not even Bank of England notes. This does not normally matter in practice because most if not all traders will accept these notes in Scotland and Northern Ireland, although acceptance of non-Bank of England notes in England is much more variable.

Imitation bank notes, coins and tokens

Apart from the obvious illegality of passing off counterfeit bank notes and coins, there is legislation which regulates and requires the consent of HM Treasury for the:
* making, selling or distribution of imitation British coins
* making or issuing metal coins and tokens
*use of imitation bank notes and coins
* making or using pictorial representations of British coins or bank notes.
See also www.hm-treasury.gov.uk

[Page updated: 04/06/2012]

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