QUESTION ONE

Arianne and Bob have been best friends for many years. Bob has recently been fired from his job and is concerned about how he will pay his bills. At first, he tries to hide his struggles from Arianne, but he eventually informs her of his problems and his fears that he will lose his house. Arianne offers to help him out financially, but Bob refuses, stating that he fears that accepting from Arianne will affect their friendship.

Two weeks later, Bob asks Arianne whether she would still be willing to help him out financially. Arianne states that she would love to, but that she does not think she can, as her father might soon need to go into a care home. Bob is very upset by this and says that he supposes that Arianne was never serious about helping him and simply wanted to make him feel bad because she was financially better off than him. Bob then storms out and refuses to answer Arianne’s calls for two days.

Arianne then knocks on Bob’s door and hands him a cheque for £20,000, which she informs him represents the entirety of her life savings, but which she is giving to him as a gift, as he is the most important person in her life. Bob accepts the cheque and immediately pays it into his bank account, despite the fact that he has an interview for another job that afternoon. Bob gets the job, which comes with a £30,000 signing bonus. Bob uses some of the money to redecorate his house and go on a worldwide cruise, depositing the rest in his bank account. When Arianne discovers this, she asks him whether he intends to pay her back the £20,000 she gave him. He states that he does not, as it was a gift.

Advise Arianne and Bob.