Bar Review Question of the Day By Pieper Bar Review
May 17 2022
A father with two children owned a company. The son moved away from home after college to seek his fortune and the daughter remained to help her father run the company. Several years later, the father liquidated the company and deposited the proceeds in a joint account in the names of himself and his daughter. When he opened the account, he told the daughter that although the money would be legally hers when he died, he wanted her to share it equally with the son. The daughter agreed and wrote to the son advising him of the liquidation and the account, but did not mention her agreement to share the funds. The son made a fortune as the founder of an online video rental business. Since his son was financially secure, the father and daughter agreed to that she no longer had to share the joint account with her brother. Shortly thereafter, the father died and the son learned of the father-daughter agreement and its subsequent rescission. Will the son prevail in a suit for one-half of the company’s proceeds?
(A) Yes, because his rights became vested at the time the agreement was made, and the father-daughter agreement cannot be thereafter changed without his consent.
(B) Yes, because the father-daughter agreement could only be rescinded in writing.
(C) No, because the son’s rights as a third-party beneficiary were terminated before he had materially relied upon them to his detriment.
(D) No, because the father-daughter agreement was unnecessary to secure the son’s financial security.
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