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Question:


Jim has been hiding a secret from Belinda that he has a girlfriend, Sheena for the last 5 years. They met when they were enrolled in a website design class. Jim has been spoiling Sheena by giving her a lot of money every month. Recently, they have been quarrelling a lot and Jim has decided to recover the money he has given to Sheena. He says to his lawyer that the money had been a loan, not a gift. Sheena disagrees and claims that the money had been a gift. After they have calmed down, they meet up to patch things up. Jim and Sheena draft and sign a document before Jim gives it to his lawyer to formalise it. In the document, Jim agrees that he will not recover the money he has given to Sheena, but that Sheena is to help him in his online business that has not been doing well. In exchange for Jim’s promise, Sheena agrees to help Jim with his online business because Jim needs Sheena’s website design skills to improve his online business.

 

5. Has Sheena given valid consideration for Jim’s promise?

QUESTION: "Which case from the book "Michael A Lambiris and Laura Griffin Viets, First Principles of Business Law (OUP Australia & New Zealand, 11th ed, 2020)" - Chapter 6 - MAKING CONTRACT we can apply for this question?"


Answer:


For a contact to be valid and enforceable, one of the very important feature is the consideration. It means something of value must be exchanged between the both parties. 

Gift on the other hand is transfer of a good or property gratuitously by giver without any consideration and is a unilateral promise without consideration and obligation from recipient party.

Also if someone gives a gift, it becomes other recipient’s property without any obligation and it cannot be taken back unless it was given in exchange of a promise which is known as conditional gift. A conditional gift can be revoked too if the condition is not fulfilled. It's like payment in advance and it's not final until the future promised event happens.

Hence in given case, it's a valid consideration for Jim's promise and if Sheena doesn't helps Jim in his business than the gift can be revoked. But Jim must make sure that what exactly will be the help from Sheena. It should not be ambiguous and should be measurable in terms of monetary value because help is a very subjective and vague term.

 

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