My mom had contracts with me over the years for various situations. It just spelled everything out in black and white for both of us. I don't ever remember it being for money type things, because that has never been an issue, but more like, "If I get to do this thing/have this privilege, I agree to the following terms..."
This. It doesn't have to be a binding legal contract.
Cali, in the case of your BIL, what I would do if I was in your in-law's situation, with an adult child living at home - I'll assume working few PT time hours, not enough to make any kind of rent - it might include something like:
1. After your car payment is made, groceries are bought, and cell phone (or other applicable) bills are paid, 50% of your remaining paycheck must go into a savings account.
2. You will spend X hours each day looking for a 2nd job.
or something like, if the parents are paying for the car, the child can only use the car to get to work, look for a job, etc. and must find a ride to any recreational activities...as long as the child is not working, they can't consume alcohol during the week...the child is expected to fill out 10 job applications each week...if the child is unable to find a job, they need to take classes at a community college or enroll in some sort of training program...all things I've seen parents stipulate in writing.
IMO, adult children who are living reduced-rent or rent-free under their parents roof DO have an obligation to be respectful, and if the goal of their parents is to get them financially stable enough to move out, to work towards that. BUT: Parents who allow their adult children to live at home need to realize that their children are ADULTS and get to make their own choices, and sometimes those are going to be choices that will get them kicked the heck out of their parent's. Those parents are CHOOSING to let their child live at home, no one is holding a gun to their head and forcing them (and if the kids are affording a trip to disney, they can afford to live elsewhere. Maybe not saving money, and maybe not in the best area, but they'd manage just fine). Maybe the kids are being selfish and irresponsible, but instead of calling to complain about it on the radio, the parents should actually help the kids be accountable for their actions and tell them it's time to move out.