It might be why past leases I’ve signed have had a clause addressing partial payments.
The above opinion is inconsistent with the Federal Reserve’s take on the matter:
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.
Section 31 U.S.C. 5103, entitled “Legal tender,” states: “United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues.” This statute means that all U.S. money as identified above is a valid and legal offer of payment for debts when tendered to a creditor.
Let’s not conflate an invitation to treat as some obligation without terms.
Yes, if a written contract explicitly discusses partial payments then the contract covers that.
However, a transaction at a grocery store does not constitute a written contract, or arguably even an actual contract.
Would “stop giving people free money” be considered a drastic action?
Also, this has a bearing on the situation because many of them are without a job.
Who, exactly, are these people getting “free money” from the government? Because the government is no longer “paying people to stay home” during a pandemic, and old-style welfare ended in 1996. To whom and what are you referring?
When the seller says “I will sell you this for $200 and the buyer says yes, that does not constitute an executed contract. It may be the end of a successful negotiation, it may even create a contract, but the contract isn’t executed until it’s typed up and signed, or in the case of a retail transaction, until the money and goods change hands. And an unexecuted contract has the same value as any other random piece of paper.
I’m sticking with this, my evidence is that it’s consistent with how the law treats these transactions. You can walk away from your groceries and leave them on the belt after they have been rung up without being charged with theft.
You can strike an agreement to buy something, a handshake agreement, but you can generally walk away from that agreement until the money and goods change hands, because that’s when the contract is executed in a retail transaction. The exception would be the sort of transaction where you actually HAVE a signed contract, like a real estate transaction.
Even in that case, you can negotiate with the seller and agree to buy his house, you can shake hands and go to dinner, he can have his lawyer draw up the contract with the terms you agreed on and you can stop by his office and, instead of signing, tell him you changed your mind. Even though the document has been created, it’s not a legal contract until it’s executed.
I may not be a lawyer, but I was in sales and I owned my business and had legal advisors and I spent a large amount of time drafting proposals and contracts that had legal force. Talk is cheap, but you don’t have a legally binding deal until you have either payment or the signatures of all parties on a binding contract. This concept was very central to my business, and I saw many people that did not understand this lose money.
And as to your contract law hypothetical about Bob’s debt being canceled because he offered a $200 partial payment and Joe wouldn’t accept anything less than full payment……cite please? I have never heard of any business law theory that comes anywhere close to suggesting that is possible under any circumstance.
I have heard a variation of an opposite scenario, where Joe accepts a $200 partial payment on the $500 debt even though Bob wrote “PAID IN FULL” on the check, and the law is all over the place as to whether that discharges the rest of the debt. But that’s not your scenario.
Just revisiting this post. Last year it had been announce CVS was closing about 900 stores (nearly 10% of its roster) I just went to a local CVS recetly to get quick snacks and when I went to the front saw the self-checkouts and NOBODY working in the front end. Wow that’s really trusting!
Yes, I’m still waiting for a real lawyer who has done contract law to give us their opinion.
In the U.S., the recognized legal tender consists of Federal Reserve notes and coins. Creditors are required to accept them as payment offered to discharge a debt; however, except where prohibited by state law, private businesses may refuse to accept some or all forms of cash tender provided that a transaction has not already occurred and debt has not been incurred by the customer.
The question really is - at what point is a contract executed and the debt created? Ultimately, it depends what the judge says is correct.
As to partial payments - refusing a good faith offer to pay a debt can result in the debt being cancelled. This was told to me by an Chartered Accountant, presumably from his formal training. Of course, the creditor could always argue that the partial payment was a ruse, and the offer was not a good faith attempt to settle as fast as possible, but instead an attempt to prolong the problem. Again, depends what the judge believes.
So… any lawyers out there?
I’m still NAL, but this source claims it’s a misreading of the UCC.
Plus, I’ve gotta go with common sense. It’s very common for mortgage lenders to refuse to accept partial payments, and AFAICT, none of the thousand of lawyers in the US have ever been successful in getting their client’s mortgages discharged because the lender refused to accept a $5 payment. If it was a valid legal theory, you’d see some evidence in practice.
Or the mortgage contracts simply have clauses that allow refusal of partial payments without discharge.
Which makes even less sense, wading through the legalese. If I offer $100 on my $1,000 debt and it is refused, then $100 of my debt is cancelled, according to clause (b). Now I owe $900…
So how long do I have to wait to offer the $100 again to take another $100 off my debt? And another…?
This is not accurate. The proposal has been made but it is far from becoming a law at this point. Besides the reasons given are both labor shortage and current prices. Not just the labor shortage.
IANA lawyer though my deceased first wife was. She did, among other things, banking law and regulation.
As I recall her explanation, there is a thing under UCC & the associated case law called a “restrictive endorsement.” Which amounts to, e.g. sending in a check for $100 on a $1000 debt with a statement written on the back “This payment completely settles this debt.” or similar words.
If the creditor endorses the check & deposits it, the trap is sprung. Their sig proves they knowingly accepted the $100 subject to the offered terms. We have provable offer and acceptance so the contract revision (i.e. debt reduced to $100 then paid off with this check) is fully in force.
That interpretation was real and operative decades ago. But has long since been changed in the real world, not least by clauses in almost all loan agreements saying that the borrower agrees in advance that any restrictive endorsements they may later make are without force or effect.
The UCC itself is a model code that is made real only to the degree that the various states adopt laws similar to it. Most states have adopted most of it verbatim, but, this being the USA, almost every state has their tweaks. Both as originally adopted and as changed over time for reasons that often make sense only to legislatorcritters. So restrictive endorsements may be prohibited or rendered null & void as a matter of statute in some (many?) states.
The key to what I understand is “good faith”. offering $5 today toward a $1000 debt isn’t good faith unless you really can only afford $5. But if you offer “I have $500 today, here take it, and I hope to have the other $500 by Tuesday” (no strings attached) then the debtor cannot refuse to accept it unless the contract said so.
But the key question we are arguing over is how and when an implied contract is created during the purchasing process. Bolstering my point is that the people programming self-checkouts have seen it necessary (? Advisable?) to make the customer agree that they will not try to use cash.