Nikita's Problem

Lau has learned from Nikita how to be a lawyer, under a very generous arrangement whereby he doesn’t need to pay anything for his tuition until and unless he wins his first court case. Rather to Nikita’s’ annoyance, however, after giving up hours of his time training Lau, the pupil decides to become a musician and never takes any court cases. Nikita demands that Lau pay him for his trouble and, when the musician refuses, decides to sue him in court. Nikita reasons that if Lau loses the case, he, Nikita, will have won, in which case he will get his money back, and furthermore, that even if he loses, Lau will then have won a case, despite his protestations about being a musician now, and will therefore still have to pay up.

Lau reasons a little differently however. If I lose, he thinks, then I will have lost my first court case, in which event, the original agreement releases me from having to pay any tuition fees. And, even if he wins, Nikita will still have lost the right to enforce the contract, so he will not need to pay anything.

They can’t both be right. So who’s making the mistake?

Nikita reasons that if Lau loses the case and he wins, Lau will have to pay him and that if Lau wins the case, he, Lau, will still have to pay him because he, Lau, will have won a case.

Lau reasons that if he loses he won’t have to pay because he will have lost his first court case and the original agreement releases him from having to pay any tuition fees and if he wins, Nikita will still have lost the right to enforce the contract, so he won’t need to pay anything.

I think that the problem here is that both of them are giving less credit to the original agreement in one of their assumptions and more in the other one, let me explain:

When Nikita reasons that if Lau loses the case he, Lau, will have to pay him he doesn’t care about the original statement he made with Lau, but if, by the other side, he, Nikita, loses, he takes care about the original statement, so Lau pays him.

When Lau reasons that if he loses he won’t have to pay he gives importance to the original statement and in the other hand, if he wins, he forgets about the original statement.

They need to either invalidate the original statement or give it full value. If they invalidate it, then the winner of the case will get the privileges (if Lau wins he doesn’t need to pay Nikita and if Nikita wins Lau has to pay him), if they give it full value, the winner of the case will lose the privileges (if Lau wins he needs to pay, if Nikita wins Lau doesn’t have to pay).