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3. Will their mother succeed in an action for $500 brought against the brother after April 30?
The siblings made the agreed payments in January, February, and March. In April, however, the brother refused to make any payment and notified his sister and mother that he would make no further payments.
The aged mother of a sister and brother, both adults, wished to employ a live-in companion so that she might continue to live in her own home. Their mother, however, had only enough income to pay one-half of the companion's $2,000 monthly salary. Learning of their mother's plight, the siblings agreed with each other in a signed writing that on the last day of January and each succeeding month during their mother's lifetime, each would give their mother $500. Their mother then hired the companion.
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A is incorrect. Modern contract law is based upon the objective test, which does not consider a party's private intent. The brother's intent is irrelevant. Further, whether a contract was formed is not at issue. The issue is whether the mother has contractual rights that may be asserted.
C is incorrect. The mother is simply asserting her rights as an intended beneficiary to the contract; her claim is not solely based on her relationship to the son. Furthermore, there is no rule of contract law which states that a parent may not sue a child.
D is incorrect. The promise to pay $500 was made in exchange for a mutual promise to pay the other $500. Because consideration was present, a contract was formed, and the $500 payments will not be considered gifts.