Consumer Law, Warranties Contract Regarding Joint Checking Account Funds

[mtowle]

1. Contract is between two parties in SC who have a joint checking account.
2. Contract states the Party A agrees not to withdraw any amount from the joint checking account and if Party A does then Party A agrees to pay to Party B the amount taken plus $2500.
3. The relationship ended between both parties. Party A wanted her name off of the joint checking account. Party B said he was going to close out the account but never did. Party A got tired of waiting and closed the account. The bank in turn wrote a check to Party A for the remaining funds.
4. Party B as filed a lawsuit to collect the remaining funds plus the additional $2500.

Questions..
1. Is the contract valid or is it invalid due to Undue Influence because Party B could have left the joint checking account open forever, essentially forcing Party A to have her name on it or have to pay the $2500 in the contract.
2. If it's valid then is $2500 going to be too excessive according to the judge. Will a judge reduce this?

 

[Antigone]

1. Contract is between two parties in SC who have a joint checking account.
2. Contract states the Party A agrees not to withdraw any amount from the joint checking account and if Party A does then Party A agrees to pay to Party B the amount taken plus $2500.
3. The relationship ended between both parties. Party A wanted her name off of the joint checking account. Party B said he was going to close out the account but never did. Party A got tired of waiting and closed the account. The bank in turn wrote a check to Party A for the remaining funds.
4. Party B as filed a lawsuit to collect the remaining funds plus the additional $2500.

Questions..
1. Is the contract valid or is it invalid due to Undue Influence because Party B could have left the joint checking account open forever, essentially forcing Party A to have her name on it or have to pay the $2500 in the contract.
2. If it's valid then is $2500 going to be too excessive according to the judge. Will a judge reduce this?

The party agreeing to this contact was not very smart. A judge will have to decide what is what ~ we don't have a crystal ball and can't tell you what the judge will do.

He/she may agree that there is a binding contact, he/she may say no, there is no consideration. It can go either way.

 

[army judge]

This may have looked like a contract, but it wasn't. Their are no damages. Even though A got the remaining proceeds, she didn't withdraw them.

The bank sent the remaining funds to A. B, if he gets anything, might receive the funds sent to A. That us doubtful, because both had rights to the funds in the account, as theyvwere jointly owned.

That is doubtful, however, because the checking account was a standard joint checking account with rights of survivorship. The agreement that was entered into wasn't a contract because there was no consideration for A.


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[Antigone]

This may have looked like a contract, but it wasn't. Their are no damages. Even though A got the remaining proceeds, she didn't withdraw them.

The bank sent the remaining funds to A. B, if he gets anything, might receive the funds sent to A. That us doubtful, because both had rights to the funds in the account, as theyvwere jointly owned.

That is doubtful, however, because the checking account was a standard joint checking account with rights of survivorship. The agreement that was entered into wasn't a contract because there was no consideration for A.


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I was leaning in that direction but was quite certain. Thanks Army!!

 

[mtowle]

Question...

Can you explain consideration? What if Party B agreed to pay Party A a sum of money because she did not receive any equity in the house that is owned by the two of them? Can that be considered consideration? In the contract if Party A moved the funds from the joint checking account then it was deemed that Party B would not have to pay Party A then sum of money. So Party B's agreement to pay the sum of money was consideration then it was definitely conditional. Would conditional consideration make a contract invalid?

On a separate note, Party B paid Party A the money she originally put down on the house when it was first built, but that did not include any equity. That can't be considered consideration can it?

Also could the contract be deemed unconscionable because it is so one sided?

Thanks for your help!