Legal tender is a form of money that a country's courts of law recognize as satisfactory payment for any monetary debt. When legal tender is offered to pay a debt, it extinguishes the debt, meaning the debtor cannot be successfully sued for non-payment if they pay the exact amount in legal tender

. Key points about legal tender include:

• It is established by law and typically consists of the national currency, including coins and banknotes issued by the government or authorized institutions

• Creditors are required to accept legal tender to settle debts, but private businesses are not obligated to accept it for transactions where no debt exists, and they may set their own payment policies

• Legal tender laws prevent other forms of payment (such as checks, credit cards, or cryptocurrencies) from being considered official money for settling debts, although these can be used as substitutes in transactions

• The exact amount due must be tendered in legal tender; no change can be demanded when paying a debt with legal tender

• Legal tender status varies by jurisdiction and currency denominations. For example, in the UK, certain coins are legal tender only up to specific amounts, and banknotes are legal tender in England and Wales

In summary, legal tender is the officially recognized money that must be accepted to settle debts, ensuring a standardized means of payment within an economy