2. Discuss the following situation, focusing on whether or not the parties involved have the capacity to

contract and, if so, to what extent is any resulting contract binding:

Lukas is 13 years old. He enters into a contract with Leah (an adult) to purchase of a guitar. Leah

then decides that she does not wish to sell the guitar and alleges that no valid contract exists as

Lukas is too young to be able to enter into a legally binding contract. Is Leah correct? Would your

answer differ if Lukas changed his mind and did not wish to purchase the guitar, but Leah wished

to enforce the agreement?

2. Case Study

ABZ COMPANY is a 11-year-old fertilizer manufacturing company in Punjab, decided to expand their business in 3 other states namely Karnataka, Tamilnadu and Assam where the product is having good demand. They planned to approach farmers directly to understand their demands and also the dealers in the said state to establish the products.

Mr. Aditya who is looking after the HR department of AMS was been called by Mr. AM Singh. He informed Aditya that, "Aditya today I am excited as we are expanding our business in other parts also. So, I want you to identify best candidates for our marketing department who can establish our products in the new market". He continued, Aditya I want 3 best marketing candidates in place within a week. Don't wait for any further order complete the task in a best possible way." Mr. Aditya also started his work with immediate effect.

He finalized 3 best candidates namely Mr. Kushwa, Mr. Dev and Mr. Bowmick. All the three candidates were having good experience and excellent track record in top fertilizer companies. After Recruitment Mr. Aditya introduced them to Mr. AM Singh thereafter Mr. Singh assigned with their duties.

Challenge to MR. Aditya

After a month Mr. AM Singh called Mr. Aditya and started a heated argument as follows, "Aditya I believed you and asked you to recruit 3 best candidates, Once you finalized I didn't had a second thought, I placed them for the task and you blasted all my dreams". Confused Aditya asked in a polite voice "But sir I brought best candidates, I am not able to understand the issue sir. I didn't even get the opportunity to meet them after I left them in your cabin"

Mr. Singh said "OK, let me explain you clearly. Except Mr. Bowmick who is placed in Assam, both of your other 2 candidates could not bring any business, they failed and are in verge to give up themselves. So Mr. Aditya tell me what should I do now. Why should I pay you if you are unable to do even a basic HR job."

Questions on Case Study

1. Outline what went wrong in the case.
2. Who is at fault Mr. Singh or Aditya or the 2 failed candidates
3. How the fertilizer company can come out of this issue.
4. What are the HR concepts that you can correlate with this case.