# Why were the maximum legal tender limits for coins eliminated? **URL:** \ **Category:** Factual Questions\ **Created:** [October 17, 2004, 7:56pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702 "2004-10-17T19:56:48Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [October 17, 2004, 7:56pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/1 "2004-10-17T19:56:48Z")
Inspired by the legal tender comments in [this thread](http://boards.straightdope.com/sdmb/showthread.php?t=281341), I remembered that there used to be limits on how many pennies, or how much in silver coins was legal tender. It was $5 in pennies, and maybe $10 in silver. Above that, coins were not legal tender, whatever that exactly means. Then at some point these restrictions have since been lifted, a somewhat perplexing step to take in view of all the inflation in recent decades. But why was it decided to lift the restrictions? Was it related to the end of the gold standard and the end of specie payments? The way I figure it is this: paper money, in technical terms, isn’t really money but only a promise to pay, with the discontinuation of true gold and silver money, the only way to perpetuate the fiction of the redeemability of paper “money” was to lift the legal tender limits on coins. Is that what really happened? Can **Samclem** or some other person knowledgeable in this arena shed any light? ---
**Author:** ![seosamh](https://avatars.discourse-cdn.com/v4/letter/s/ce7236/32.png) [@seosamh](https://boards.straightdope.com/u/seosamh)\ **Post date:** [October 17, 2004, 9:55pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/2 "2004-10-17T21:55:34Z")
Section 102 of the Coinage Act 1965 states: “All coins and currencies of the United States, regardless of when coined or issued, shall be legal-tender for all debts, public and private, public charges, taxes, duties and dues.” This suggests that there is no limit to the amount of coins you can use. In the UK there are limits to the amount of coins which are regarded as legal tender: £ 2 - for any amount £1 - for any amount 50p - for any amount not exceeding £10 25p (Crown) - for any amount not exceeding £10 20p - for any amount not exceeding £10 10p - for any amount not exceeding £5 5p - for any amount not exceeding £5 2p - for any amount not exceeding 20p 1p - for any amount not exceeding 20p From my days working for London Underground I recall a passenger presenting himself at Shepherds Bush (Met) station at 9 o’clock on a Monday morning [i.e. the busiest period of the entire week] trying to pay for a weekly season ticket with 10p coins. The booking clerk - quite correctly - told him to bugger off. ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [October 17, 2004, 10:57pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/3 "2004-10-17T22:57:40Z")
> [@seosamh](#): > > From my days working for London Underground I recall a passenger presenting himself at Shepherds Bush (Met) station at 9 o’clock on a Monday morning [i.e. the busiest period of the entire week] trying to pay for a weekly season ticket with 10p coins. The booking clerk - quite correctly - told him to bugger off. Fair enough, but that has nothing to do with “legal tender”. The clerk could have told him to bugger off even if he wanted to pay with legal tender. “Legal tender” means that it must be accepted to _pay a legal debt_, not for purchases. ---
**Author:** ![Freddy\_the\_Pig](https://avatars.discourse-cdn.com/v4/letter/f/a587f6/32.png) [@Freddy\_the\_Pig](https://boards.straightdope.com/u/Freddy_the_Pig)\ **Post date:** [October 18, 2004, 2:50am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/4 "2004-10-18T02:50:18Z")
> [@Spectre of Pithecanthropus](#): > > . . . I remembered that there used to be limits on how many pennies, or how much in silver coins was legal tender. It was $5 in pennies, and maybe $10 in silver. The limit was 25 cents for pennies and nickels and $10 for silver coins. Per Snopes: > [@](#): > > Up until the late 19th century, pennies and nickels weren’t legal tender at all. The Coinage Acts of 1873 and 1879 made them legal tender for debts up to 25 cents only, while the other fractional coins (dimes, quarters, and half dollars) were legal tender for amounts up to $10. This remained the law until the Coinage Act of 1965 specified that all U.S. coins are legal tender in any amount. See also **Cecil** ’s [take on the matter](http://www.straightdope.com/classics/a1_330.html), which is slightly different from the above. Why were the limits repealed? First of all, purge yourself of the idea that this has anything to do with merchant convenience. As **Colophon** points out, merchants could and can refuse to sell goods and services for any form of payment considered inconvenient. Legal tender applies only to settlement of debts. With respect to debt settlement, the limits were a hangover from a time when the United States was on a gold standard and other forms of money weren’t considered quite real. Even during gold standard days, the Treasury didn’t mint small coins in gold–gold was very valuable, and it would have been difficult and expensive to mint so many coins with such tiny amounts of gold. So they used copper and silver instead, and declared them to be legal tender–in small amounts. Silver was still specie, and the coins still had intrinsic metallic value, but they _weren’t gold_. Ergo, they were not to be used to evade the standard contractual requirement that large debts be settled in gold or in bank notes which were redeemable on demand in gold. (The danger that anyone would or could profit by doing so was slight, since coins and notes were and are interchangeable, but the gold standard had symbolic value and Congress wasn’t taking any chances.) With the demise of the gold standard, the distinction between base-metal coins and bank notes lost its meaning (both are fiat money), and the restrictions were repealed. ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [October 18, 2004, 5:19pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/5 "2004-10-18T17:19:31Z")
> [@Freddy the Pig](#): > > Silver was still specie, and the coins still had intrinsic metallic value, but they _weren’t gold_. Ergo, they were not to be used to evade the standard contractual requirement that large debts be settled in gold or in bank notes which were redeemable on demand in gold. For much, if not most of our history, the silver in silver coins was not worth nearly as much as their face value, so they weren’t really a commodity money at all. In fact, the “free silver” debate of the late 1800s, which is hardly every fully explained, was about just that. The way the Mints used to operate, was that you could bring them gold that you had mined, and they would mint it into coins. They’d deduct a fee for processing and a small seignorage, and then give the net proceeds, in gold coins, back to you. That was how new money entered the system. The free silver people wanted to have the same policy with silver, but with the value of silver hovering between thirty and sixty cents an ounce, the government could not justify stamping out silver coins on that basis. We could have silver coins today, but we don’t. That’s not only because of the general inflation since 1960, that caused the price of silver to rise above the face value of the coins. It’s also because around that same point, people’s expectations of how coins should function in the economy changed. Before then, the idea was that one should be able to make, conveniently, small day-to-day purchases with coins only. Now, however, in the U.S. at least, the idea is that coins are just there to make change, as someone here once said, like “division remainders”. ---
**Author:** ![Freddy\_the\_Pig](https://avatars.discourse-cdn.com/v4/letter/f/a587f6/32.png) [@Freddy\_the\_Pig](https://boards.straightdope.com/u/Freddy_the_Pig)\ **Post date:** [October 18, 2004, 6:15pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/6 "2004-10-18T18:15:54Z")
I’m not sure if you’re disagreeing with my post, or just expanding on it. > [@Spectre of Pithecanthropus](#): > > The way the Mints used to operate, was that you could bring them gold that you had mined, and they would mint it into coins. They’d deduct a fee for processing and a small seignorage, and then give the net proceeds, in gold coins, back to you. But they wouldn’t mint gold coins of less than a dollar. For that, they used copper and silver–producing coins which were primarily fiat money (because the face value was greater than the specie value), but that had significant backup value as commodity money. (This could come into play during a time of general inflation, and it finally did during the 1960’s). Since fiat money wasn’t considered as reliable as commodity money, silver and copper coins were legal tender only in small amounts. The bimetallists wished to coin silver as pure commodity money, at a price which would have amounted to a devaluation of the dollar. This would have been wonderful for debtors but lousy for creditors, accounting for the passion with which the campaign of 1896 was waged. ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [October 18, 2004, 7:23pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/7 "2004-10-18T19:23:11Z")
**Freddy the Pig** , I think I misunderstood you. I thought you were saying that silver dollars (and all the other silver denominations) were considered full-value commodity money in the same way as gold, and I disagreed with that, but you’ve cleared it up, now. Amazingly enough, in the days of private gold coinage in California, the shortage of silver fractional currency led to the minting of gold quarter- and half-dollars. If you have access to a Red Book you can find them described there. ---
**Author:** ![hudsonbay](https://avatars.discourse-cdn.com/v4/letter/h/8797f3/32.png) [@hudsonbay](https://boards.straightdope.com/u/hudsonbay)\ **Post date:** [August 2, 2013, 2:01am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/8 "2013-08-02T02:01:33Z")
Not quite all coins and currencies of the United States are still, or even ever were, legal tender in the US. For example fractional currency issued by the government before 1863 was not authorized by legislation, so altho used was not legally legal tender… and Trade Dollars, though made in the US, contained more silver & had a higher intrinsic value than the Morgan Dollar circulating at the time. By law, they were strictly for use in trade with the Orient, in order to compete with Mexican issues called “Mex Dollars”. They were nonetheless official issues of the US intended for use in American Business, just not in the US, thus distinguishing them from “Hawaii” & “North Africa” US issues intended for use ion WW2 combat areas but legal for use in the US as well, and various occupation currencies issued for use overseas at various times, but not specifically intended for use by American based businesses. These were intended for use by American service ppl and local populations but could not be repatriated to the US and were not legal tender in the US. “Section 5103 of Title 31, United States Code, provides in part: “UnitedStates 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 provision means that United States currency serves as a valid and legal form of payment for goods, services, or other obligations. However, there are no Federal laws requiring private businesses to accept cash as a form of payment and such establishments are free to develop their own payment policies unless state laws indicate otherwise.” ---
**Author:** ![Keeve](https://avatars.discourse-cdn.com/v4/letter/k/f07891/32.png) [@Keeve](https://boards.straightdope.com/u/Keeve)\ **Post date:** [August 2, 2013, 2:13am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/9 "2013-08-02T02:13:07Z")
But can you buy a zombie with it? ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [August 10, 2013, 6:54am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/10 "2013-08-10T06:54:27Z")
> [@Keeve](#): > > But can you buy a zombie with it? Apparently so, if your zombie reviving post magically predates not only the OP but also the SDMB itself by 25 years. ---
**Author:** ![pdunderhill](https://avatars.discourse-cdn.com/v4/letter/p/4bbf92/32.png) [@pdunderhill](https://boards.straightdope.com/u/pdunderhill)\ **Post date:** [August 10, 2013, 1:24pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/11 "2013-08-10T13:24:34Z")
Seosamh: ‘From my days working for London Underground I recall a passenger presenting himself at Shepherds Bush (Met) station at 9 o’clock on a Monday morning [i.e. the busiest period of the entire week] trying to pay for a weekly season ticket with 10p coins. The booking clerk - quite correctly - told him to bugger off.’ '83 - '95 I worked in the Bush, various odd and curious BBC sites. Shepherds Bush is a very bizarre area, do you remember the pub on the corner of the Green next door to the theatre? it staged an attempted assassination of Oliver Cromwell. Peter ---
**Author:** ![Bremidon](https://avatars.discourse-cdn.com/v4/letter/b/ac91a4/32.png) [@Bremidon](https://boards.straightdope.com/u/Bremidon)\ **Post date:** [August 10, 2013, 5:36pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/12 "2013-08-10T17:36:40Z")
> [@Colophon](#): > > Fair enough, but that has nothing to do with “legal tender”. The clerk could have told him to bugger off even if he wanted to pay with legal tender. “Legal tender” means that it must be accepted to _pay a legal debt_, not for purchases. As I understand it, it depends on when the restrictions on payment are communicated and when the contract formed. This is why a store can have a sign that says they won’t accept anything above a $50. If you communicate the restrictions before the contract is formed, then you can basically dictate how payment can be made, including restricting how many pennies you will take and in what form (rolled or unrolled, for example). Once the contract has been formed, the retailer can no longer add additional restrictions to how he gets paid. Barring any previous restriction on acceptance (like demanding that it be in writing, or that limits acceptance to certain actions), I believe that once the clerk says: “That will be $200”, and the buyer attempts to pay, then offer and acceptance have been satisfied and a contract is formed. It would be too late for the clerk to tell him to shove off, because he doesn’t feel like taking pennies. One word of warning: do not just throw the pennies at the clerk, or otherwise cause a mess; you might get nailed for causing a public disturbance that way. Dang, I got Zombied. Oh well. ---
**Author:** ![Gary\_Robson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gary_robson/32/3448_2.png) [@Gary\_Robson](https://boards.straightdope.com/u/Gary_Robson)\ **Post date:** [August 10, 2013, 9:46pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/13 "2013-08-10T21:46:17Z")
> [@Spectre\_of\_Pithecanthropus](#): > > Apparently so, if your zombie reviving post magically predates not only the OP but also the SDMB itself by 25 years. You’re seeing something different than I am. That post shows up as “08-01-2013, 08:01 PM” for me. Can you please take a screen shot and send it to me? ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [August 10, 2013, 9:51pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/14 "2013-08-10T21:51:20Z")
[quote=“Gary “Wombat” Robson, post:13, topic:269702”] You’re seeing something different than I am. That post shows up as “08-01-2013, 08:01 PM” for me. Can you please take a screen shot and send it to me? [/QUOTE] Psst…check out post #7. **Hudsonbay** was the zombie resurrector. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [August 10, 2013, 9:52pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/15 "2013-08-10T21:52:23Z")
Server error. Couldn’t post, then was told this was a duplicate. Maybe the server error caused the confusion? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [August 11, 2013, 9:02pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/16 "2013-08-11T21:02:03Z")
> [@Bremidon](#): > > As I understand it, it depends on when the restrictions on payment are communicated and when the contract formed. This is why a store can have a sign that says they won’t accept anything above a $50. If you communicate the restrictions before the contract is formed, then you can basically dictate how payment can be made, including restricting how many pennies you will take and in what form (rolled or unrolled, for example). > > Once the contract has been formed, the retailer can no longer add additional restrictions to how he gets paid. > > Barring any previous restriction on acceptance (like demanding that it be in writing, or that limits acceptance to certain actions), I believe that once the clerk says: “That will be $200”, and the buyer attempts to pay, then offer and acceptance have been satisfied and a contract is formed. It would be too late for the clerk to tell him to shove off, because he doesn’t feel like taking pennies. > > One word of warning: do not just throw the pennies at the clerk, or otherwise cause a mess; you might get nailed for causing a public disturbance that way. > > Dang, I got Zombied. Oh well. But the UCC does talk about how payments are to be made in a “commercially reasonable manner.” I don’t know how case law has decided it, but if I owe you $100, then a credit card, a check, $100, 5 $20s, or even 100 $1 bills would be commercially reasonable. I can’t see a judge or jury saying that dumping 10,000 pennies on your desk is commercially reasonable. And the “legal tender” argument has been overstated. Again, if I owe you $100, and I present you with 10,000 pennies for payment, then I have made a prima facie case that I attempted to satisfy my debt. If you refuse it, that doesn’t necessarily mean I’m off the hook for the debt. There’s the common law duty of good faith and fair dealing as well. Also “usage of trade” is implied in contracts. If I pump $50 worth of gas at your convenience store (for those rare ones that don’t require pre-pay) it is generally understood in the business that you don’t want or expect 5,000 pennies and my attempt to satisfy my debt might well be held as a breach of contract. ---
**Author:** ![Spectre\_of\_Pithecanthropus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/spectre_of_pithecanthropus/32/12343_2.png) [@Spectre\_of\_Pithecanthropus](https://boards.straightdope.com/u/Spectre_of_Pithecanthropus)\ **Post date:** [August 11, 2013, 9:50pm UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/17 "2013-08-11T21:50:35Z")
[quote=“Gary “Wombat” Robson, post:13, topic:269702”] You’re seeing something different than I am. That post shows up as “08-01-2013, 08:01 PM” for me. Can you please take a screen shot and send it to me? [/QUOTE] Someone must have fixed it by the time you posted this. When I first saw it, though, the date it gave was 12/31/1969. ---
**Author:** ![Bremidon](https://avatars.discourse-cdn.com/v4/letter/b/ac91a4/32.png) [@Bremidon](https://boards.straightdope.com/u/Bremidon)\ **Post date:** [August 12, 2013, 9:19am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/18 "2013-08-12T09:19:16Z")
> [@jtgain](#): > > But the UCC does talk about how payments are to be made in a “commercially reasonable manner.” I don’t know how case law has decided it, but if I owe you $100, then a credit card, a check, $100, 5 $20s, or even 100 $1 bills would be commercially reasonable. I can’t see a judge or jury saying that dumping 10,000 pennies on your desk is commercially reasonable. > > And the “legal tender” argument has been overstated. Again, if I owe you $100, and I present you with 10,000 pennies for payment, then I have made a prima facie case that I attempted to satisfy my debt. If you refuse it, that doesn’t necessarily mean I’m off the hook for the debt. There’s the common law duty of good faith and fair dealing as well. Also “usage of trade” is implied in contracts. > > If I pump $50 worth of gas at your convenience store (for those rare ones that don’t require pre-pay) it is generally understood in the business that you don’t want or expect 5,000 pennies and my attempt to satisfy my debt might well be held as a breach of contract. > [@](#): > > § 3-603. TENDER OF PAYMENT. > > ``` > (a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract. > > (b) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates. > > (c) If tender of payment of an amount due on an instrument is made to a person entitled to enforce the instrument, the obligation of the obligor to pay interest after the due date on the amount tendered is discharged. If presentment is required with respect to an instrument and the obligor is able and ready to pay on the due date at every place of payment stated in the instrument, the obligor is deemed to have made tender of payment on the due date to the person entitled to enforce the instrument. > > ``` It’s (b) that’s initially interesting here. It would seem that if I offer you $50 dollars to pay the contract and you refuse, then the $50 is discharged. I suppose (a) might play a role if there are any standard definitions on what is acceptable payment. I am not aware of any such definitions regarding payment in pennies, but maybe someone can pull a cite from somewhere. I do not see exactly how “usage of trade” plays a role here, and I tried to find some example where UoT was used to justify not accepting a form of payment, but I found nothing. Incidentally, while searching for the above, I saw that Snopes (ok, not exactly a law firm) is pretty clear of their [interpretation](http://www.snopes.com/business/money/pennies.asp). Short version: you can make whatever restictions you want on payment before contract formation; if you make no restrictions, legal tender is implied; after contract formation you can no longer make new restrictions. I did run into several claims that the Supreme Court has ruled on this, but I was unable to find a single cite, so I doubt that this is true. I did find one case where a court in Colorado refused payment in pennies, but I doubt that would hold up if challenged. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [August 12, 2013, 10:33am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/19 "2013-08-12T10:33:52Z")
> [@Bremidon](#): > > It’s (b) that’s initially interesting here. It would seem that if I offer you $50 dollars to pay the contract and you refuse, then the $50 is discharged. No, not with respect to contracts. Note the words “an obligation to pay an **instrument**.” We have to look up what the word “instrument” means. § 3-104(b): > [@](#): > > (b) “Instrument” means a negotiable instrument. § 3-104(a): > [@](#): > > (a) Except as provided in subsections (c) and (d), “negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it: > > (1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder; > > (2) is payable on demand or at a definite time; and > > (3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor. An ordinary contract would not be an “instrument” by this definition. ---
**Author:** ![Bremidon](https://avatars.discourse-cdn.com/v4/letter/b/ac91a4/32.png) [@Bremidon](https://boards.straightdope.com/u/Bremidon)\ **Post date:** [August 12, 2013, 11:22am UTC](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702/20 "2013-08-12T11:22:25Z")
> [@Alley\_Dweller](#): > > No, not with respect to contracts. > > Note the words “an obligation to pay an **instrument**.” > We have to look up what the word “instrument” means. > > § 3-104(b): > § 3-104(a): > > An ordinary contract would not be an “instrument” by this definition. Sorry, I’m not following. Are you saying that the bill generated by the contract is not an instrument for this purpose? And the definition of instrument is: instrument n. 1) a written legal document such as a **contract** , lease, deed, will or bond. 2) an object used to perform some task or action, ranging from a surgeon’s scalpel to any hard thing used in an assault (a blunt instrument). [Next page](https://boards.straightdope.com/t/why-were-the-maximum-legal-tender-limits-for-coins-eliminated/269702.md?page=2)