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In-Laws Reclaim Gift Given To Child's Former Spouse

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In a landmark decision, the German Federal Court of Justice has ordered a divorcÈ to repay a Ä29,000 (£25,000) cash gift to his former in-laws.  The in-laws gave the money to the man and his ex-wife to use as a down-payment to bid for a house at auction.  After the divorce, the man got the house and the in-laws asked for their money back.  "It's not just the grasping ex that Germans must contend with during a divorce, now it's the in-laws as well," quips  writer David Charter.

The rationale for the decision lies in the law of contract.  In the judges' opinion, the "contractual basis" of the gift depended on the in-laws' child being able to benefit from the gift.  As soon as the couple divorced and the man took control of the property, the in-laws' child could no longer "enjoy the fruits" of the gift.

While the the ruling does raise the interesting prospect of in-laws reclaiming presents given to a child's former spouse if the marriage breaks down, the court warned that "if the child benefits from the gift for a long period of time (for example if the couple lives together in a house donated by the in-laws), then only a part of the gift must be paid back."

"If the parents want to avoid this and make sure that only their own child benefits from the gift, then they should offer it only to that child," the judges added.

Will British judges follow the lead set by their German counterparts?  Only time will tell...

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