In accordance with article 128 (1) sentence 3 of the Treaty on the Functioning of the European Union (TFEU), article 16 (1) sentence 3 of the Statute of the European System of Central Banks and of the European Central Bank (ESCB Statute), and article 10 sentence 2 of Council Regulation (EC) No 974/98 on the introduction of the euro, euro banknotes are the only banknotes which have the unrestricted status of legal tender in all participating member states.
Therefore, by virtue of public law, everyone is required to accept payments in euro banknotes as proper fulfillment of a financial obligation to avoid legal detriment.
However, under German civil law, as a general rule, the principle of freedom of contract applies. This principle allows those involved in a legal transaction to freely determine contractual content. The parties to a transaction can accordingly also agree on or rule out a certain method of fulfillment. In this respect, the principle of freedom of contract supersedes the above-mentioned provisions in public law, which require any party to accept payments made with legal tender as proper fulfillment of a financial obligation.
Public law likewise recognises restrictions regarding payments in cash: as a general rule, it is no longer possible to settle tax liabilities by making a cash payment to the local collection office.