In: Accounting
Hubert was a very wealthy married businessman who had a mistress named Stormy Knight. Hubert bought an apartment for her for $800,000 some three years ago. He also had been giving her $200,000 a year for her living expenses over the past ten years. Unfortunately, Hubert suddenly died and had not left anything in his will for Stormy Knight. Stormy Knight claimed against the estate saying that Hubert had promised her $200,000 a year for the rest of her life. The relatives of Hubert say there is no such valid contract. Stormy knight has a scribbled note from Hubert promising $200,000 a year for the rest of her life. 1) What type of agreement is this? Is it legally enforceable? 2) What factors would the court consider in determining whether there was an enforceable contract for the $200,000 a year? 3) What are the cases that you can rely on? 4) If there is an enforceable contract are there any additional arguments that the relatives could use alleging the contract is invalid?
TO FORM A LEGAL ENFORCEABLE CONTRACT, CONTRACTOR AND CONTRACTEE MUST FORM A LEGAL CONTRACT IN SIGNING A STAMP PAPER.
ONLY A SCRIBBLED PAPER NOTE DOES NOT FORM LEGAL ENFORCEABLE CONTRACT. TO OWN A WILL OF A DEAD PERSON ONE MUST HAVE HIS NAME IN WILL OF THE DEAD PERSON.
ANSWER 1- SCRIBBLED NOTE IS JUST A AGREEMENT TO GIVE MONEY BUT IT IS NOT A CONTRACT. TO FORM A CONTRACT THERE MUST BE 2 PARTIES SIGNING THE AGREEMENT ON STAMP PAPER REGARDING THE ACCEPTANCE OF THE OFFER. IT IS NOT ENFORCEABLE CONTRACT.
ANSWER-2 COURT MUST GO THROUGH THE LEGALITY OF THE CONTRACT. IN THIS CASE, CONTRACT IS NOT ON STAMP PAPER AND IT IS JUST ON SIMPLE PAPER ,DOES NOT GIVE THE ENFORCEABILITY OF THE CONTRACT.
ANSWER-3 CASES WHICH ARE ON STAMP PAPER,OR THERE IS AGREEMENT IN FRONT OF THIRD PARTY REGARDING PAYMENT OF 200000 PER YEAR, IT WILL BE ENFORCEABLE, OTHERWISE IT IS NOT ENFORCEABLE CONTRACT.
ANSWR-4 IF THE CONTRACT IS LEGAL AND ENFORCEABLE THEN RELATIVES HAVE NO RIGHT TO ARGUE REGARDING PAYMENT OF $ 200000 TO MISTRESS.