Contract Law?
Case:
Ong, a college student, had got a loan form a local bank to pay his educational expenses. After Ong had graduated, the bank e-mailed to him requesting repayment of the loan. Ong refused to repay claiming that he was a minor at the time when he entered into the above loan agreement.
Questions I have to answer:
1) WAS THERE A CONTRACT?
2) IF THERE IS A CONTRACT WAS IT BREACHED?
3) WHAT ARE THE REMEDIES FOR BREACHING THE CONTRACT?
I need help with these questions, much appreciated, thank you!
1. Contract: When someone contracts with a minor, generally speaking, they run the rick of the minor voiding the contract. Only the minor may void the contract, due to the minor’s limited capacity to enter into a contract.
Without viewing the loan agreement, if it is a valid written contract, with Ong receiving money now, in exchange for a promise to pay money with interest in the future, then it is a valid contract.
However, without having knowledge of any specific banking laws to the contrary, Ong may void the contract.
2. Breach: The contract was breached when Ong declared to the loan company that he intended not to pay the loan amount.
3. Remedies: The bank may not be able to enforce the contract, as Ong may void the contract.
However, there is a legal doctrine called “Unjust Enrichment.”
Since Ong received the money already, and the bank did not get repaid, the court could order Ong to pay any of the money left over, or the full amount.