Question

1. David and Hans were in a bar together and both had a few too many alcoholic beverages. They discussed David selling Hans his son’s BMW (that he bought for him) because he was frustrated that his son had decided to do another year of high school rather than going to university. They created an agreement on a bar napkin and David and Hans signed with the bartender witnessing it. The agreement was that David would sell his son’s 2008 BMW for $5000 ($2000 up front and the rest in $250 monthly installments) and that Hans could pick it up in 2 weeks – giving David time to let his son know he would no longer have a car. In his drunken state, David had the year wrong and the car was actually a 2010 BMW. The next day, David had no recollection of the conversation with Hans. Two weeks later, Hans showed up with $2000 ready to take the car. An argument ensued and David threatened to call the police for trespassing if Hans did not get off his property. When David’s 17 year old son discovered this situation he was furious and so David decided to go ahead with the contract because he did not like his son’s attitude.

David accepted the $2000 and gave Hans the car. David’s son changed his mind about university and David needed some money for tuition so he went to Duncan and sold him the $3000 claim against Hans for $2500. Shortly after there was an issue with the car that was going to cost Hans over $5000 to fix so he stopped paying for the car. Duncan sued Hans and Hans then countersued David.  

Explain the legal issues with each of these relationships and what you think the result of this situation would be if it went to court. (25 Marks)

Answer 1

Different situations and their interpretations:

1. Agreement on a bar napkin - This is null and void as there is no legal backing for this type of agreement. The same is not acceptable in court of law even though the bartender witnessed it as the same had been carried out in unconscious state as clear from "The next day, David had no recollection of the conversation with Hans."

2. David accepted $2000 - On accepting the consideration for selling of car, it created an binding agreement between both David and Hans which can be challenged in court of law.

3. David selling financial right to Duncan - This sell of financial right is also legally acceptable and is acceptable under law.

4. Huns stopping payment - This cost is to be born by Huns due to ownership transfer on payment. David or Duncan are not responsible for this.

5. Duncan sued Hans - Claim of Duncan over Hans is acceptable under law.

6. Hans countering over David - Hans cannot claim over David in absence of any written agreement for repair issue.