Question

Define or explain the following concepts.
Limited legal tender.

Answer 1

The 'Legal tender' is the money that is recognised by the law of the land, as valid for payment of debt. It must be accepted for discharge of debt. A person who refuses to accept this money a legal action can be taken against. Legal tender could be: Limited or unlimited legal tender . A limited legal tender is that form of legal tender money, which can be paid in discharge of a debt up to a certain limit. Beyond this limit, a person may refuse to accept the payment and no legal action can be taken against him. In India, coins are limited legal tender. For example: 50 paise coins can be offered as legal tender for dues up to Rs. 10 and smaller coins for dues up to Rs. 1. On the other hand, paper notes are unlimited legal tender in India because they can be can be paid in discharge of a debt up to any limit.