Case 1

1. A has lent $100,000 to B to be returned in 10 months in equal instalments of $10,000 every month. B made payment for sincerely for the first three months.After 3 months, B honestly explains that she is not in a position to return the balance $70,000. Realizing the situation, A agrees to accept $50,000 in exchange of the old debt of $70,000. B pays a $50,000 accordingly.

a. Can A later insist that B still owes $20,000? Yes or No or both? [1]

b. When Yes, explain why. [5]

c. When No, explain under what conditions? [9]

HINT: You must answer each of the above question logically

Case 2

While strolling on beach, you discover Heena unconscious and face down in the water. You pull her ashore, administer first aid, and bring her back to life. Shaken, but grateful, she promises to pay you $500 every year for the remainder of your life. However, when you attempt to collect the first payment, she states that she has changed her mind and refuses to pay you anything.

Question:

Does Heena have a legal obligation to pay you? If no, why?

1. Analyse Case 2 in regard to "Consideration" (hint)