Inconvenient funds?

May 18, 2006 11:43 AM

Assuming denomination of currency was not specified in the contract, could someone hold the terms of a contract unfulfilled because the denomination of currency was inconvenient and/or costly to process?

This is just a curiosity, so I'm not in such a situation. But say that it never specifies in a lease that rent must be paid by check or bills. If someone paid in pennies, could the landlord hold the terms of the lease unfulfilled? It seems like it would get dicey if much time and/or money had to be expended to verify the amount of money or get a bank to take it. Is this something regularly specified in contracts to avoid this problem?

posted by ontic to law & government (8 comments total)

Lots of discussion of this via Google.
posted by alms at 11:50 AM on May 18, 2006

Relevant portion: " Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills."

But you specify that such stipulation was not in the contract. I would assume (ass out of you and me) that if he could demonstrate in court undue hardship in processing the currency or a valid reason why he couldn't accept it, he probably could sue for you to pay in another legal tender.
posted by geoff. at 11:56 AM on May 18, 2006

Perhaps the landlord would rig the plumbing so water came out only a drop at a time.

Cecil Adam basically punted on this, and said "probably legal, but I wouldn't try it."
posted by adamrice at 11:59 AM on May 18, 2006

I assume that when you enter into a contract to pay someone, you establish a debt. Payment for debts has to be accepted if it is in legal tender.

on preview: oh, according to the straight dope that adamrice linked, all US currency is legal tender. They have to accept any cash you give them.
posted by atrazine at 12:12 PM on May 18, 2006

This story of a man paying a $1000 court fee in pennies is interesting. From my reading, the payment was considered perfectly valid. But judges have immense discretion to impose fines or punishments for almost any reason, and in this case the judge decided to fine the guy another $533 for causing inconvenience.
posted by hattifattener at 12:52 PM on May 18, 2006

The U.S. Code just says that all United States coin and currency is legal tender for payment of debts. Payment for goods and services is another ballpark, and geoff's relevant quote applies.
posted by eritain at 1:37 PM on May 18, 2006

The US code might say it's OK, but Judge Jerry D. Ray (hattifatteners link) says you can charge someone $500 in handling fees to receive that $ 1,000 in penies.
posted by Ken McE at 3:03 PM on May 18, 2006

I think the answer is: you can only get away with it once at best.

The first time, your landlord really has no case for breach. He will either accept the payment and give you notice that such future payments are unacceptable or just refuse the payment out right.

Any attempted payments in pennies after he gives you notice will likely followed up with a three-day notice to pay rent or quit. Now you can fight it out in court. And there is not likely to be a judge in the country who would rule in your favor.

And, the truth of the matter is, it is far more expensive to try to force an unusual tender than it is to comply with the spirit of the contract.
posted by GIRLesq at 3:08 PM on May 18, 2006