In: Operations Management
John Smith is 16 years old; his parents purchase a red Volkswagen bug for his birthday. He does not like the car because he wanted a red Porche. The parents take the car back to the dealership. The parents tell the dealership this contract is void because our son lacked capacity to enter into this contract. Are the parents right? Use IRAC format.
Issue= Whether the contract between the parents and the dealer is valid or void?
Rule- A contract is valid if it has all the elements of the valid contract such as offer and acceptance, the legality of the contract, capacity to enter in the contract, consideration.
Application= If we look at the given case, the contract between the dealer and the parents has all the elements of the contract. There were an offer and acceptance the purpose of the contract was legal, parents and the dealer has the capacity to enter the contract and there was a valid consideration of car and money in return.
Conclusion= The parents were not correct as the contract was valid. The contract was not made between the kid and the dealer, in fact the contract was between the dealer and the parents and all the elements of a valid contract were fulfilled. So the parents of John Smith were not right.
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