Does a cash-less place have to accept cash if other payment option failed?

Question

I had it happen to me a few times that my credit card was blocked or deactivated by the bank without letting me know, and I only that found out while trying to pay. To counter that I always carry some cash. Now I've been hearing about some newfangled "cashless" restaurants. Thankfully, I'm not aware of any where I live, but what would happen if I went into one of those, ate, tried to pay with card, it failed, then I offered to pay with cash?

As I understand the legality would work something like this:

I accept the the contract where I agree to pay with card in exchange for food

I attempt to fulfill the contract to the best of my ability, but am prevented from doing so by circumstances beyond my control

At this point I owe the restaurant the money, but since the original transaction failed, this is a debt, which I offer to settle with legal tender

Is that how it would work? Or are there some additional issues? Or is it one of those gray areas that'll only become concrete once it happens and actually goes to court?

Answer 1

While it is true that cash is legal tender, this can still be overridden by mutual agreement (i.e. in a contract). So the legal tender status only matters if payment methods were not agreed upon before entering into an agreement.

In other words: If a restaurant lets you eat without telling you they do not accept cash, they will have to accept cash. However, if they explicitly tell you they only accept card payments, they can insist on this later.

This applies in both the United States, in Germany, and in Canada (see e.g. It may be legal tender, but more businesses are snubbing cash).

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So to address your points:

As I understand the legality would work something like this:

1) I accept the the contract where I agree to pay with card in exchange for food

Yes - however, in accepting the contract you also accept that the restaurant is "cashless" (assuming the restaurant clearly tells you so, e.g. by putting up a sign or by saying it in person).

I attempt to fulfill the contract to the best of my ability, but am prevented from doing so by circumstances beyond my control

Yes. Since you attempted to fulfill the contract, you did not commit the crime of theft (which requires intention not to pay). However, you still owe what you promised when entering into the agreement, which is to pay with a card.

At this point I owe the restaurant the money, but since the original transaction failed, this is a debt, which I offer to settle with legal tender

No. As explained above, if the agreement stipulates a specific payment method, this generally overrides the "legal tender" aspect.

In short:

• You agreed to pay with a card, so you are required to pay with a card.
• If you cannot pay with a card, you have not fulfilled your part of the agreement. It is is arguable that it is not your fault, but this does not change your obligation.

Now you must either negotiate a suitable alternative (cash, cheque, golden watch...), or come back to pay later with a card. Also, the business may be able to charge you additional costs, such as extra accounting work or interest because of your non-standard payment - that would depend on the details.

Answer 2

They don't have to accept cash - they could make arrangements for you to return with a different card, for you to send a cheque through the post, for you to make a direct transfer to their account, or they could waive the cost of the meal.

For all but the last option, you have a debt with them which they could recover through court if payment wasn't forthcoming - or they could report you for theft.

Your defence would be that you had made two good faith attempts to pay, the first being frustrated by the failure of the card transaction, the second by their policy. If you have discussed alternative ways of paying them - and have made attempts to do so - a court is unlikely to conclude you had intended to steal.

But they don't have to accept cash - if none of the other options works, they could waive the cost of the meal.

Answer 3

That is not how it would work.

A term of our contract is that I will not accept cash. You have breached the contract by not paying when the contract required you to. Your breach of that term does not force me to waive the term that you won't pay with cash (although I can - for consideration or otherwise).

I can sue you, claiming the money owed and damages for the breach of your not paying when required. If and when I win, the judgement is a debt and that can be settled with cash.

Alternatively, I can detain you (using reasonable force) and call the police to have you arrested for theft.

As an aside, you state "am prevented from doing so by circumstances beyond my control" like this excuses you from fulfilling the terms of your contract. In general, it doesn't. You must do what you contracted to do irrespective of outside circumstances. It is possible for a contract to be frustrated, however, that requires a significant and radical change to the rights and obligations where it would be unjust to hold the parties to their word. Your bank cancelling your credit card doesn't qualify.