(c) Equally, for the purposes of the equitable doctrine of tracing, the term, ‘money’ is by no means confined to physical cash-it extends to all assets capable of being identified in or disentangled from a mixed fund. 13 Yet, as will be seen, the credit balance standing at his disposal may be used as a means of discharging financial obligations, and thus may be regarded as ‘money’ to that extent. He does not ‘own’ anything at the bank, nor is the bank a trustee of the money deposited with it. 12 Instead, he has become a creditor who can recover his debt by action. (b) Whilst an individual may claim to have ‘money in the bank’, it is clear that he no longer owns physical notes and coins which he handed over to the bank, for property in those items will have passed to the bank itself. (a) The action for ‘money had and received’ can be brought when the subject matter is not money itself but some form of security therefor or other equivalent. But a much broader approach is adopted in other cases. The instances just noted suggest a narrow and technical approach to the meaning of ‘money’, perhaps because each of them has a specific and distinct statutory derivation. Thus, where a statute required payment ‘in current coin of the realm’ it was held that only payment in physical cash would suffice-payment in goods or in other manner would not discharge the obligation. (e) The terms of a given statute may create an obligation to pay ‘money’ and it may be necessary to decide in what manner the obligation is to be performed. 9 Clearly, in determining whether authorization is required (or an offence has been committed), it is important to establish the precise meaning of ‘money’ in this context. For these purposes, a ‘deposit’ is a ‘sum of money’ paid on terms that it will be repaid at a later date, whether with or without interest.
(d) In the United Kingdom, the taking of deposits in the course of a deposit-taking business is prohibited, in the absence of appropriate authorization. 8 An instrument requiring the transfer of something other than ‘money’ is thus not a negotiable instrument for the purposes of that Act. (c) For the purposes of the Bills of Exchange Act 1882, a bill of exchange must require the drawee to pay ‘a sum certain in money’. (b) Likewise, a contract for the transfer of land only involves the ‘sale’ of that if the buyer is to pay a consideration in money. 5 If the consideration moving from the buyer is not ‘money’, then the contract is one of barter, which in many respects differs from a contract for the sale of goods. (a) If a contract is to fall within the scope of the Sale of Goods Act 1979 then it must involve a transfer of goods ‘to the buyer for a money consideration, called the price’. The following examples may provide an initial outline of some of the difficulties caused by this elusive term: 3 The universality of money and monetary systems no doubt also contributes to a certain complacency in seeking to identify a working definition. Money is a term so frequently used and of such importance that one is apt to overlook its inherent difficulties, and to forget that the multitude of its functions necessarily connotes a multitude of meanings in different legal situations. All of this terminology may have further consequences for example, only an obligation expressed in money can involve any obligation of payment or repayment, or carry any right to interest. It therefore seems appropriate for the lawyer to seek a definition of money, given the frequent use which is made both of the term itself and its many derivatives, including debt, damages, payment, price, capital, interest, tax, pecuniary legacy, and doubtless many others. 1 Money is a fundamental notion, not only in the economic life of mankind, 2 but also in many spheres of law.
Yet the true answer must, if possible, be determined. The troublesome question, ‘what is money?’ has so frequently engaged the minds of economists that a lawyer might hesitate to join in the attempt to solve it.
Words are the tokens current and accepted for conceits as moneys are for values.įrancis Bacon (1561–1626), The Advancement of Learning (1605) The Status of Money as a Means of Payment The Meaning of ‘Money’-A Functional Approach
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