Subject: Aspect of Contract . What is the legal obligation (if any) in the follo
ID: 427675 • Letter: S
Question
Subject: Aspect of Contract
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What is the legal obligation (if any) in the following situations? Give reasons for your answers.
1. Each month, Henry, Kate and their grandson, Sam, enter a general knowledge competition, each paying AED10 towards the entry fee. Sam always emails the entry form, pays the entry fee and receives the confirmation of entry. Last month, they won the competition and the prize was AED 6000. Sam refuses to share the AED 6000. Advise Henry and Kate. All family members – please apply rule about family agreements with respect to an intention to create legal relation.
2. Bob borrows money from Fair Bank to set up his own small business, selling fitness books and equipment which pays for his own lessons to become a fitness trainer.After a few months Bob’s main supplier finds out he is only 17 and refuses to trade further with him. This means Bob doesn’t have enough business to pay for his lessons to become a trainer. He is also behind with payment of his mobile telephone account.
Advise Bob about the enforceability of each of the four contracts he has entered into:
i. For his lessons to become a fitness trainer (Training contracts are enforceable for a mother)
ii. For his mobile phone. (Is mobile phone a necessary)?
Note: in the above question the bold requirements are important to do
Explanation / Answer
1. In this case, even though family relations are involved, there is a considerable existence of mutuality in the arrangement happening between the grandparents and the grandson. All the 3 members were equal participants in the competition and so there existed an intention to create legal agreement. Hence it is imperative for Sam to share the prize money with his grandparents.
2.a) Generally, tuition and training contracts do come with a clause of repayment. If Bob was undergoing the training as part of business training, then the business is liable for paying the fee. If he was an independent learner, then Bob is liable to pay the fees to continue the course. However, each contract does specify certain time allotment for payment of tuition or training fee. So, ultimately the tuition contract is enforceable on Bob for his lessons to become a fitness trainer.
b) Bob had consumed the service offered by his mobile phone operator, so he is liable for the amount as per his consumption. The contract is enforceable. Generally such contracts come with a delayed payment fine as well, so Bob must try to settle this contract as soon as possible to avoid paying heavy fines.