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Law Notes Personal Property Law Notes

Character Of Money Notes

Updated Character Of Money Notes

Personal Property Law Notes

Personal Property Law

Approximately 153 pages

A collection of the best Personal Property Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through forty-eight LLB samples from outstanding law students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor". This set of notes earned its author a prize in exams. Although this set of notes did not earn its author a 1st in exams, the notes are at a high st...

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Character of Money

Money is a social fact

Money is a social fact created by social usage in a particular country. The law cannot create money but it can facilitate the use of a certain kind of asset as money e.g. by conferring legal tender status on it or by applying a favourable system of property rights to it.

Not all money is legal tender.

When a debt is owed, it is not deemed to be paid until the creditor accepts the tender of the debtor. Legal tender gives the debtor a means to compel the creditor to accept the tender. Is the creditor fails to accept legal tender, and then tries to sue, he will be unable to obtain any alternative and will have to pay the other side’s costs.

All Bank of England notes are legal tender (Currency and Banking Notes Act s.1 (2))

Cupro nickel coins more that 10 pence are legal tender up to 10. Cupro nickel coins not more than 10 pence are legal tender up to 5. Copper coins are legal tender up to 20p.

Once legal tender has been offered then the creditor is obliged to accept it. However the debtor must then place the tender separately so he is not earning interest and benefitting from the creditor’s assets. (Edmonson v. Copland)

Mann says that legal tender status is vital to determining what is money.

Fox disagrees, he says legal tender status merely helps to determine primary sources of money and then other sources of money can be defined from that.

Does legal tender status matter today?

  • Legal tender limits are practically unimportant in almost all private commercial transactions BUT

  • Legal tender defines the primary form of money, to which all other forms of money are reducible.

  • All secondary money forms involve obligations denominated in monetary units of account which can ultimately be discharged by payment of legal tender.

  • The exercise of sovereign power to issue money with legal tender status is one sign that a monetary system is legally independent.

Money defined by its functions

Medium of exchange - a means of facilitating exchange transactions without needing to resort to the barter of commodities

- derives its value from the usability, the fact that it can be exchanged for something else

- it is associated with defined quantities of value, which are determined by the community in which it is circulating. As such one can only define money in terms of what the community will accept.

Unit of account - a universal denominator of value

- money is the proper medium and measure of exchangeable things (Case of Mixt Monies)

- a means of economic measurement, unique to each constitutionally independent money system.

- modern token money systems have a circular definition: 10 is 10 because it is 10. The pound defines itself as a unit of value. The pound is defined by the circulating media in a particular country (the UK or Cyprus)

- legal tender rules will explain what the definitive forms of money are in a legal system

Store of value - a store of value that is capable of being passed to another in return for valuable economic commodities

- does not...

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