Among the following cash and non-cash payment instruments, which one is referred as 'Legal Tender Money'?

Options :
  1. Cheques
  2. Drafts
  3. Bills of exchange
  4. Currency notes

Answer and Explanation :-

Answer: Option 4


Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. The origin of the term "legal tender" is from Middle English tendren, French tendre (verb form), meaning to offer. Legal tender is variously defined in different jurisdictions. Formally, it is anything which when offered in payment extinguishes the debt. Thus, personal cheques, credit cards, debit cards, and similar non-cash methods of payment are not usually legal tender. The law does not relieve the debt obligation until payment is tendered. Coins and banknotes are usually defined as legal tender.

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