Application of Contract Law APA standard.

Application of Contract Law

Application of Contract Law

Foakes vs Ben

Foakes owed Ben money, and the two agreed that if Foakes paid Ben $500 at once and give the rest in form of installments, Ben would forgive him from paying interest on debt. However, Ben brings the suit against Ben stating that the agreement to forgive interest payment was entered without appropriate consideration. Ben claimed that the consideration consisted Foakes doing what he was already obligated to do in paying the initial amount of the debt ("Contract Law Case note: Foakes v Beer 1884", 2016).

Issue Part

Can forgiveness of interest in a prearranged repayment plan that lacks consideration render the contract unenforceable? The holding on the question should be, no. according Lorde Coke, payment of lesser amount of money can’t be a satisfaction of a larger amount of money. Creditors have relevant reasons to decrease the rates and spare one from paying the interests, in order not to force their debtors into bankruptcy or default. However, debt consideration is not a valid consideration. Under the law, it is something that Ben was obligated to do. Therefore, the small payment of debt is not a consideration.

Under the existing legal obligation, the case seems to fall under two distinct forms. Thus, an increase in an initial amount even though there is no additional change or work to the spectrum of performance as an outcome of such changes. Then the debtor decides to only pay the original contract amount. Secondly, a reduction in debt owed and no change in scope of performance. If the original payer or the debtor pays the full amount of the debt, then they can sue for a return of their money they can’t collect under legal-duty rule.

Hamer vs Sidway

Uncle agreed with his nephew that he would pay him $5000 if the nephew would not drink, swear, use tobacco, and play cards and gamble for money until he was the age of 21. When the nephew reached 21, the uncle sent a letter stating that the nephew has scored the money, but he is not of the age to handle money. He states that he will hand he money once the nephew is of the right age and that he will pay with some interest. Twelve years later, the uncle died without having given the money to his nephew. The nephew therefore sues executor of state ("Hamer v Sidway", 2016)

Issue Part

Is abstinence from legal behavior which is stated to benefit the promise considered to make a valid and enforceable contract with the promiser who gets no recognizable gain? The holding for the question is reversed in favor of Harmer, the nephew. According to the rule, a discharge of any legal right at the request of a different party is enough consideration for a promise. Any suspension or damage or patience of a right will be sufficient to uphold a promise.

Desisting legal behaviors is patience of a legal right that constitutes consideration. The nephew gave up a right in abstaining from behaviors even if the behavior was to benefit him. Uncle Sidway continuously waived his right to keep the money at the end of the term by involving another promise. Therefore, consideration isn’t measured as a gain to the promisor.

References

Contract Law Casenote: Foakes v Beer 1884. (2016). Netk.net.au. Retrieved 4 April 2016, from http://netk.net.au/Contract/Foakes.asp

Hamer v Sidway. (2016). Courts.state.ny.us. Retrieved 4 April 2016, from http://www.courts.state.ny.us/reporter/archives/hamer_sidway.htm