What constitutes a legally binding contract regarding the repayment of a debt?

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What constitutes a legally binding contract regarding the repayment of a debt?

Before we married, my wife took out a loan with an ex-boyfriend as a co-signer. Things happened, and to sum it up he paid off all of the debt without consulting her. After doing this, he had her sign a document saying she would pay $xxx per month until it was paid off to him. She has not been able to do so. Is this document legally binding and is it legal for him to make up a document turning the money she owed to the bank, into money she now owes to him?

Asked on May 14, 2011 under Bankruptcy Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) The ex-boyfriend may pay off the entire loan without consulting with your wife; he was a cosignor.

2) However, he may NOT obligate her without her consent; no one may contract on behalf of another person. Unfortunately for your wife and for you, you say that she signed the agreement; under the circumstances, this contract may be binding, since your ex-wife chose to sign the agreement (and there was good consideration for the agreement--his having paid off the loan). Since she signed, she is likely obligated; it is a contract she agreed to.

3) Had she not signed anything, she'd be in good shape--he *might* be able to have sued her for her half or share of the original loan, but it's far from definite, since his decision to pay off the loan in full without her asking him to do so might have been taken to have been a gift.


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