Legal Capacities

Question 1

Section 10(1) of CA 1950

Answer 1

All agreements are contracts if they are made by the free consent of parties competent to contract,…and are not hereby expressly declared to be void.”

No free consent and/or parties not competent : the contract is void.

Question 2

Section 11 of CA 1950

Answer 2

Every person is competent to contract:-

(i) who is of the age of majority according to the law to which he is subject ( 18 years old – Age of Majority Act, 1971)

(ii) who is of sound mind, and

(iii) who is not disqualified from contracting by any law to which he is subject. (qualified : not bankcrupt person)

Question 3

Age of Majority Act 1971
Case?

Answer 3

Case: Mohari Bibee v. Dharmodas Ghose.

The Privy Council held:
that an infant cannot make any valid contracts- General rule – contract by minor is void.

Question 4

Soundmind

Answer 4

Section 12 (1)

“capable of understanding it and of forming a rational judgment…

Section 12 (2) & (3) :

A person who is usually of unsound mind, but occasionally of sound mind or vice versa, may make a contract when he is of sound mind.

Question 5

Effect of a contract by a minor =

case?

Answer 5

=The contract is VOID!!!

Mohari Bibee v. Dharmodas Ghose.

The appellant lent the respondent (a minor) the sum of Rs20,000. Later, the respondent brought an action for a declaration that the agreement was void because he is still a minor and lack of capacity.
Court held: The agreement is void and therefore it is not binding on the respondent.

Question 6

5 Exceptions to Contract by Minors

Answer 6

1. Contract for necessaries
2. Contract of apprentices
3. Contract for scholarships
4. Contract for insurance
5. Contract for marriage

Question 7

(1) CONTRACT FOR NECESSARIES
def of necessaries:

Answer 7

-bare essentials of life and includes goods and services, reasonably,e.g. food, clothes,and shelter.

Question 8

CONTRACT FOR NECESSARIES
Sec. 69-
Case:

Answer 8

Sec. 69-
Claim for necessaries supplied to person incapable of contracting, or on his account.

Case: Government of Malaysia v. Gurcharan Singh.

Held: Education was held to be included under necessaries.

Question 9

(2) CONTRACT FOR APPRENTICESHIP

Answer 9

A contract under which a minor obtains education or training for a trade or profession or beneficial experience in a trade or education.

The contract, is valid even the apprentice is a minor.

Question 10

(3) CONTRACT FOR SCHOLARSHIP
Sec. 4(a):
Case

Answer 10

Sec. 4(a):
Contracts (Amendment) Act ,1976
“…no scholarship agreements shall be invalidated on the ground that the scholar entering into such agreement is not of the age of majority.”

A scholarship agreement entered into by an infant is valid when the scholarship, award, bursary, loan or sponsorship is granted by the Federal/ State Government, a statutory authority, or an educational institution such as an university.

Government of Malaysia v. Gurcharan Singh.

The Plaintiff sued the defendant for breach of
contract. The claim was for RM11,500 which
was actually spent by the plaintiff in educating
the defendant. At the time of the contract, the
defendant was a minor.
Held: The contract becomes valid due to
necessaries and the defendant was liable for the
repayment.

Question 11

(4) CONTRACT FOR
INSURANCE

Answer 11

Insurance Act 1963
( revised 1972 )
* A minor over the age of 10 may
enter into a contract of insurance.
* However, if the minor is under the
age of 16, a written consent of the
parents or guardians is essential

Question 12

(5) CONTRACT FOR MARRIAGE
sec
case

Answer 12

Section 4 of the Age of Majority Act 1971:

Any contract pertaining to marriage, divorce and dower is valid if entered by a minor.

Rajeswary & Anor v. Balakrishnan & Ors

The P (a minor) and D agreed in their marriage agreement that the dowry is Rs3000. If there is any breach of the agreement by either party, the penalty is Rs6000. Subsequently, the D refused to perform the contract. The P sued for the penalty.
Held: The contract of promise of marriage entered by minor is valid.