Acontract is valid if the following elements are present: offer andacceptance, intention to create a legally binding agreement, legalcapacity of the parties to contract, and consideration. When theseelements are present then any contract made is enforceable in lawagainst any party who breaches the contract.
Inthis case, Darin entered into a contract with Mandarin Gems for thesale of a three-carat diamond ring. The purpose of the ring was forthe engagement of Sarah. A contract can be declared void if there wasan element of misrepresentation of facts by any of the parties. Thevalue that the second gemmologist assessed the ring to be worth was$25,500 less than what the seller appraised the ring to be worthafter sale.
Afterestablishing that there was misrepresentation on the part of theseller, Mandarin Gems, the next issue to ascertain is the rightparties to the suit. The seller, Mandarin Gems argues that Sarah didnot have any contractual rights as they had not entered into acontract with her. This is where the doctrine of privity of contractcomes in. This doctrine allows parties who enter into a contract tosue in case of breach and prevents third parties who were not part ofthe contract from claiming rights under the contract.
Thereare however cases of strict liability and warranty cases that thisdoctrine has been relaxed. Looking at this matter, the parties whoentered into a contract are Mandarin Gems and Darin. Sarah was notpart of the contract and as such, there are no contractual rightsarising to give her the capacity to sue. The only person who can suefor damages is Darin as he is the one who entered into the agreementwith the Gem Company.
Ewan McKendrick. (2015). (Revised ed.). Palgrave Macmillan.