"The presence of the sign makes it a contract that you were in violation of."
Please (I'm not being sarcastic)address the part about "This note is legal tender for all debts public and private."
How can the presence of a sign in contradiction to that not invalidate any presumed contract to begin with?
Sure thing. Right here from the U.S Treasury itself:
QUESTION: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?Quoting Snopes: "That's it. All this means is that the Federal Reserve System must honor U.S. currency and coins, not necessarily anyone else. U.S. currency and coins can be used for making payments, but a debtor does not have to pay in legal tender, nor does a creditor have to accept legal tender. If a shoemaker wants to sell his products for 8000 jelly beans per pair, he's entitled to do so; the buyer cannot demand that he accept the equivalent value in legal tender instead."ANSWER: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.
The sign is not in contradiction to the promise that the Federal Reserve System will honor your Federal Reserve Note as legal tender. See my response quoting the appropriate statute above.