Legalities of the loan

DevCoder

I have taken steps to get a proper payment plan set up as an addendum to the initial (lame) contract that was originally signed and have added a time of essence clause that failure to return the new signed document agreeing to the payment plan by the specified date and failure to meet any of the payments becomes a breach of their contract that will immediately trigger legal action.

This won't wash in court, you cannot unilaterally alter an existing contract and deem a contract void if new terms/conditions are not accepted.

You can request the additional clauses to be ratified and added to the existing contract but both parties have to agree, you cannot force the acceptance that alter the initial contract.

Rebma3

krisdorey wrote: »

This won't wash in court, you cannot unilaterally alter an existing contract and deem a contract void if new terms/conditions are not accepted.

You can request the additional clauses to be ratified and added to the existing contract but both parties have to agree, you cannot force the acceptance that alter the initial contract.

I appreciate this but as long as this results in this contract being signed it stands. Ultimately if both parties just need to agree to this change. If the borrower doesn't sign it then her intentions become clear and my daughter will accept that she needs to address this as criminal act and get the police involved regarding the way the money was procured.

Rebma3

iolanthe07 wrote: »

I suspect that such an agreement signed by a minor under age 18 will have no effect in law. You'll have to rely on the honesty and morals of the borrower. You might like to have a solicitor look over the agreement and give a professional opinion.

I agree and had hoped that this was the case. She had just turned 18 when the contract was signed.

Annisele

I'm not a lawyer, but I think that even if your daughter had been under 18 at the time, there's a good chance that would have made the contract voidable rather than void.

The difference is that a void contract simply doesn't exist, and is unenforceable. A voidable contract is one where one of the parties has the right to choose whether to make the contract void. Effectively that means that although your daughter could choose to write off the loan, she could also choose not to.

I'm not convinced your addendum would stand up even if both parties did agree to it. I'd be worried your daughter might not have given "consideration" for the change. I'd also be worried that (if relationships were to deteriorate much further than they already have) the debtor might start accusing you or your daughter of harassment. In general, if a loan agreement says repayment will be on date X, the lender doesn't get to hassle the debtor before that date. Although here, there's plenty to suggest that there was a verbal agreement to pay installments - you might be able to get that enforced in court, but if negotiation is possible that's likely to be much quicker and easier.

As you've said, there's also the larger problem of your daughter giving out these loans in the first place. She does appear vulnerable, but chances are that the people she cares for are more vulnerable still. From what you say about her, I suspect you'll have a very hard time convincing her that anybody might have taken advantage of her - but it might be easier to convince her that the people she cares for could be taken advantage of, and that might help persuade her to go to her boss.

Rebma3

Annisele wrote: »

I'm not a lawyer, but I think that even if your daughter had been under 18 at the time, there's a good chance that would have made the contract voidable rather than void.

The difference is that a void contract simply doesn't exist, and is unenforceable. A voidable contract is one where one of the parties has the right to choose whether to make the contract void. Effectively that means that although your daughter could choose to write off the loan, she could also choose not to.

Thanks that is useful to know. At the end of the day the money is gone so it is a gamble as to whether any will come back.

Annisele wrote: »

I'm not convinced your addendum would stand up even if both parties did agree to it. I'd be worried your daughter might not have given "consideration" for the change. I'd also be worried that (if relationships were to deteriorate much further than they already have) the debtor might start accusing you or your daughter of harassment. In general, if a loan agreement says repayment will be on date X, the lender doesn't get to hassle the debtor before that date. Although here, there's plenty to suggest that there was a verbal agreement to pay installments - you might be able to get that enforced in court, but if negotiation is possible that's likely to be much quicker and easier.

We are being careful about this. Negotiation is the route that is preferable and at present the agreement is that in August the borrower will pay a lump sum amount. As long as this happens it should take the pressure off a bit. Now she is also aware that this situation isn't secret any more so as well as my daughter, her parents will also be monitoring the situation. A payment plan will be agreed thereafter depending on the amount she pays. Let's hope she pays the full amount and we can be done with the worry.

Fortunately they love communicating via text message so there is at least a record of the agreement to pay regular amounts just not what those amounts would be.

Annisele wrote: »

As you've said, there's also the larger problem of your daughter giving out these loans in the first place. She does appear vulnerable, but chances are that the people she cares for are more vulnerable still. From what you say about her, I suspect you'll have a very hard time convincing her that anybody might have taken advantage of her - but it might be easier to convince her that the people she cares for could be taken advantage of, and that might help persuade her to go to her boss.

Yes her inexperience is her vulnerability. Unfortunately she has a history of engaging in situations that have made her vulnerable and caused harm to herself. This is just a less physical manifestation. That said it was her choice to hand over the money against advice... so here we are.

She has agreed to speak to her boss now just to make them aware of the situation. I don't think there is any suggestion that the people for whom she cares are vulnerable because they are protected by the policies and procedures that exist there. They don't allow for money or gifts to be exchanged between staff and the residents or their families. This said, with the boss knowing about this situation, she is responsible for ensuring that the procedures are robust enough and to monitor the situation.

Thanks for your advice. You've been most helpful.

undaunted

Rebma3 wrote: »

My daughter was in the first month of being 18 when she loaned the money so it may stand up as a loan agreement between adults - still assessing the legalities of this. She has however loaned to this woman before and been paid back. I have taken steps to get a proper payment plan set up as an addendum to the initial (lame) contract that was originally signed and have added a time of essence clause that failure to return the new signed document agreeing to the payment plan by the specified date and failure to meet any of the payments becomes a breach of their contract that will immediately trigger legal action.

I'm not a solicitor but it seems to me that she was either 18 or she wasn't. whether 18 by a day, a week, a month...... it makes no odds.


I'd also doubt that you can just unilaterally change a signed contract. You may not like it but your Daughter & this woman signed a contract and it hasn't been broken - even if I suspect that it's likely to be - lending a little, paying it back, lending a little more, paying it back.... all leading up to fleecing her for her entire savings and then disappearing perhaps?

bris

The contract in place would be considered by the person hearing the case at the time. For the small claims court it's a reasonable person and contracts don't need to be drawn up by solicitors.


This is a private agreement between two parties and what is written will be enough for the reasonable person to conclude the money was lent on the terms specified.


The agreement can't be altered unless both parties agree so going in guns blazing may have a negative affect. There is no breach until December 17 so the other party would be mad to alter that.


How the money was procured was abhorrent but ultimately irrelevant so nothing criminal about it, so you need to keep the emotions out of it.

Mojisola

Rebma3 wrote: »

To cut a long story short she has just told me that she did lend that woman the money because she cried and got other people to try to persuade her.

Rebma3 wrote: »

I don't think there is any suggestion that the people for whom she cares are vulnerable because they are protected by the policies and procedures that exist there. They don't allow for money or gifts to be exchanged between staff and the residents or their families.

I wouldn't trust people who would treat a naive youngster this way to abide by the regulations regarding clients - they will just find ways of keeping any manipulation secret.

Rebma3

To update everyone; The money was repaid in full along with a thank you present, a full year before they had agreed to repay by. It is such a relief as it could have gone either way. I'm just happy that faith in people has been somewhat restored. There are still plenty of people both willing to help others and also people who will stand by their word. It is fortunate that two of these people met in this scenario.

27cool

I'm glad that she got her money back. But I hope that she realises that she has had a very lucky escape.
You say that there are still plenty of people willing to help others.
But there are also plenty of people prepared to take advantage of their good nature.
You have only to read many threads on this forum about the subject to know this.