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Alan is a qualified accountant. Last year his father, Ben, who owns a small manufacturing business, asked him if he would prepare his tax return for him for a fee of £500. Having said he would, Alan did the accountancy work and Ben submitted the accounts to the tax authorities. Ben now refuses to pay Alan, saying that it is not right for a son to charge his father for doing him a favour.
Alan, in an attempt to encourage his daughter, Dawn, in her studies, promised that he would buy her a new car if she passed her final examinations. Although Dawn has now passed her exams, Alan is refusing to buy her the promised car.
Question
Task 1Identify which of the following categories of dealings applies.
Social or domestic / Commercial – Preparation of tax return for Ben
Social or domestic / Commercial – Promise of a new car to DawnHi Mike
For this question I just wanted to ask why Preparation of tax return for Ben is not under social and domestic because that’s what I answered and I got it wrong.
In January, Ami took over an old warehouse with the intention of opening an art gallery. As the warehouse had to be converted, Ami entered into a contract with Cis to do all the necessary painting. Cis was to be paid £5,000. Cis received an initial payment of £1,000 and agreed to have the work completed by 31 March.
At the end of February, Cis told Ami that she would not complete the work in time unless Ami agreed to increase her payment by a further £1,000. Ami agreed to ensure that the job was done on time.
On completion of the work on time, Ami refused to make the additional payment to Cis, beyond the original contractual price.
Question
Task 2Indicate which, of the following are past consideration and which are not.
Past consideration / Not past consideration – Ami’s initial payment of £1,000
Past consideration / Not past consideration – Cis’s initial agreement to complete the work by 31 March
Past consideration / Not past consideration – The work that had been done by Cis at the end of February
Past consideration / Not past consideration – Ami’s agreement to pay the further £1,000Hi Mike
I need some help understanding the meaning of past consideration.
Could you please explain to me which of these are past consideration and which of these are not. Thanks.
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