Legal tender is a legal concept but often used to refer to currencies issued under the authority of a government, and acknowledged by national law as a valid means of payment for settling debts. Practically, legal tender is the conventional currency (national currency) circulating in a country or in a given economy, which is accepted by the government as means to pay taxes 1.
If a debtor pays with legal tender, the payment must be accepted by the creditor in settlement of a debt. And the debtor will have a very good defence in court if sued for non-payment.
- Lietaer, B.A., G. Hallsmith, (2006) Community Currency Guide, Global Community Initiatives, accessed on 9 September 2013 at <https://www.community-exchange.org/docs/Community_Currency_Guide.pdf> ↩