Felix, aged 17, borrowed a sum of RM3,000 from Mr Kaya and promised to pay back the money within three months. He spent RM500 to buy an expensive jacket. He spent the balance of RM2,500 for a vacation trip to Thailand. Felix also obtained a scholarship from the Government of Malaysia to study accounting at Jaya University. He signed a written contract that he would complete his study and after obtaining suitable employment will return the whole amount spent on his education, to the Malaysian Government. Later, Felix did not pay the loan to Mr Kaya and failed to honour his scholarship agreement with the Government of Malaysia. Mr Kaya and the Government of Malaysia threatened to take legal actions against Felix. Advise the parties.