CAPACITY TO

CONTRACT
POINTS:
S. 11, C. A EVERY PERSON
IS COMPETENT TO
CONTRACT WHO IS OF THE
AGE OF MAJORITY, SOUND
MIND AND NOT DISQUALIFIED
FROM CONTRACTING BY ANY
LAW.
S. 11, C.A.
MAJORITY
SOUND MIND
NOT DISQUALIFIED FROM
CONTRACTING
THE CONTRACTS ACT
DOES NOT EXPRESSLY
PROVED FOR THE
EFFECT OF AN
AGREEMENT MADE BY
PARTIES NOT
COMPETENT TO
CONTRACT.
CASE: MOHORI BIBEE V.
DHURMODAS GHOUSE
H: THE COMBINED
EFFECTS OF SECTION 10
& 11 IS SIMILAR TO THE
SAME SECTIONS OF THE
LOCAL ACT. RENDERED
THE CONTRACT VOID.
MINORS
- THE PERSON WHO HAS NOT
REACHED THE AGE OF
MAJORITY.
THE AGE OF MAJORITY IS 18
YEARS. (THE AGE OF MAJORITY
ACT, 1971).
OTHER THAN SEVERAL
STATUTORY EXCEPTIONS, THE
GENERAL RULE IS THAT ALL
CONTRACTS ENTERED INTO BY A
MINOR ARE VOID.
CASE: TAN HEE JUAN V.
TEH BOON KIAT
ISSUE:
WHETHER THE CONTRACT
BETWEEN TAN AND TEH WAS
VOID BECAUSE TAN WAS A
MINOR?
H: AGREED WITH MOHORI BIBEE.
THE CONTRACT BETWEEN THEM
WAS VOID.
THE AGE OF MAJORITY ACT
CREATES EXCEPTION TO THE RULE
THAT ALL CONTRACTS ENTERED
INTO BY MINORS ARE VOID, VIZ:
A) CASES MARRIAGE,
DIVORCE, DOWER & ADOPTION
B) THE RELIGION AND
RELIGION RITES AND USAGES
C) ANY WRITTEN LAW FIXING
THE AGE OF MAJORITY
CASE: RAJESWARY & ANOR V.
BALAKRISHNAN & ORS
ISSUE:
WHETHER THE CONTRACT WAS VOID
BECAUSE THE PLAINTIFF WAS A
MINOR AT THE TIME CONTRACT WAS
ENTERED?
H:
THE CONTRACT WAS VALID. THE
MARRIAGE CONTRACTS ENTERED INTO
BY MINORS WERE DISTINGUISHABLE
FROM OTHER CLASSES OF CONTRACTS
AND DID NOT COME WITHIN THE
PRINCIPLES LAID DOWN IN THE
MOHORI BIBEE CASE. THE AGE OF
MAJORITY FOR ENTERING INTO A
MARRIAGE CONTRACT DIFFERED FROM
OTHER CONTRACTS.
NECESSARIES
POINTS:
UNDER THE COMMON LAW,
A MINOR IS LIABLE ON
CONTRACTS FOR
NECESSARIES.
CASE: NASH V. INMAN
ISSUE:
WHETHER THE PLAINTIFF CAN SUE
THE DEFENDANT FOR THE PRICE OF
THE WAISTCOATS?
H:
THE COURT OF APPEAL HELD THAT,
BECAUSE EVIDENCE SHOWED THAT
THE DEFENDANT ALREADY HAD AN
ADEQUATE NUMBER OF CLOTHES FIT
FOR HIS STATION IN LIFE, THE
WAISTCOATS WERE NOT NECESSARIES
AND THEREFORE THE TAILOR COULD
NOT SUCCEED.
S. 69, C.A EMBODIED
THE COMMON LAW
OF ENGLAND.
BENEFICIAL CONTRACTS OF
EMPLOYMENT AND
EDUCATION.
1) THE GOVERNMENT OF
MALAYSIA V. GURCHARAN SINGH
& ORS.

2) ROBERTS V. GRAY

3) CHAPLIN V. LESLIE FREWIN
(PUBLISHERS) LTD.
1) THE GOVERNMENT OF MALAYSIA
V. GURCHARAN SINGH & ORS.

ISSUE:
WHETHER THE CONTRACT BETWEEN THE
PARTIES WAS VOID BECAUSE THE
DEFENDANT WAS A MINOR AT THE TIME
THE CONTRACT WAS ENTERED?
H:
IT WAS A VOID CONTRACT, BUT SINCE
EDUCATION WAS NECESSARIES, THE FIRST
DEFENDANT WAS LIABLE FOR THE
REPAYMENT OF THE MONIES SPENT ON
HIM.
2) ROBERTS V. GRAY

ISSUE:
WHETHER THE DEFENDANT BOUND WITH
THE CONTRACT ENTERED INTO SINCE HE
WAS A MINOR?
H
THE DEFENDANT WAS BOUND BY HIS
CONTRACT, BECAUSE THE TEACHING AND
EXPERIENCE HE WOULD RECEIVE FROM THE
PLAINTIFF WOULD BE FOR HIS BENEFIT AND
THERE WERE NO TERMS WHICH WERE
HARSH OR UNREASONABLE TO THE
DEFENDANT. THE DEFENDANT COULD NOT
REPUDIATE ANY PART OF THE CONTRACT
AS IT WAS BINDING ON HIM.
3) CHAPLIN V. LESLIE FREWIN
(PUBLISHERS) LTD.

ISSUE:
WHETHER THE PLAINTIFF WAS
ENTITLED TO REPUDIATE THE
CONTRACT?
H:
HE WAS BOUND WITH THE
CONTRACT AS IT WAS FOR HIS
BENEFIT (MONETARY).
THE FOLLOWING POINTS
ARISING FROM S.69.
A) THE NECESSARIES MUST HAVE BEEN
ACTUALLY SUPPLIED TO A MINOR.
B) THE MINORS LIABILITY INCLUDES
NECESSARIES SUPPLIED TO ANYONE
WHOM HE IS LEGALLY BOUND TO
SUPPORT.
C) THE SUPPLIER OF NECESSARIES MAY
CLAIM ONLY A REASONABLE PRICE
WHICH MAY NOT BE THE SAME AS THE
CONTRACT PRICE.
D) THE MINOR IS NOT PERSONALLY
LIABLE.
SCHOLARSHIP
A) S.4(a) OF THE CONTRACT
(AMENDMENT) ACT 1976 PROVIDES
THAT NO SCHOLARSHIP
AGREEMENTS SHALL BE
INVALIDATED ON THE GROUND
THAT THE SCHOLAR IS NOT A
MAJOR.
B) INTENDED TO NULLIFY THE
DECISION IN GURCHARAN SINGHS
CASE.
OTHER BINDING CONTRACTS
THERE ARE OTHER LEGISLATION
THAT ALLOW MINORS TO ENTER
INTO VALID AGREEMENTS.
A) INSURANCE
B) APPRENTICESHIP
C) GUARANTEE AND INDEMNITY

A) INSURANCE
- UNDER THE INSURANCE ACT 1963,
(REVISED 1972), A MINOR OVER THE
AGE OF 10 MAY ENTER INTO A
CONTRACT OF INSURANCE.
- IF HE OR SHE IS UNDER 16 YRS, THE
WRITTEN CONSENT OF THE PARENTS
OR GUARDIANS IS ESSENTIAL.
- A MINOR OF 10-16 YRS- MAY ENTER
INTO A CONTRACT OF INSURANCE
WITH THE WRITTEN CONSENT OF THE
PARENTS OR GUARDIANS.
B) APPRENTICESHIP
- S.13 OF THE CHILDREN AND
YOUNG PERSONS (EMPLOYMENT)
ACT 1966 SAYS THAT ANY CHILD
OR YOUNG PERSON SHALL BE
COMPETENT TO ENTER INTO A
CONTRACT OF SERVICE UNDER
THIS ACT OTHERWISE THAN AS
AN EMPLOYER AND MAY SUE AS
PLAINTIFF WITHOUT HIS NEXT
FRIEND OR DEFEND ANY ACTION
WITHOUT A GUARDIAN AD LITEM.
CONT.
THIS SECTION MEANS THAT A
CHILD IS DEFINED AS ANY
PERSON BELOW THE AGE OF 14
AND A YOUNG PERSON AS ONE
BETWEEN THE AGES OF 14 AND
16.
GUARANTEE & INDEMNITY
DEF:
A CONTRACT OF GUARANTEE IS A
CONTRACT TO PERFORM THE
PROMISE, OR DISCHARGE THE
LIABILITY, OF A THIRD PERSON IN
CASE OF HIS DEFAULT.
INDEMNITY
DEF:
AN INDEMNITY IS DEFINED IN S.77
AS A CONTRACT BY WHICH ONE
PARTY PROMISES TO SAVE THE
OTHER FROM LOSS CAUSED TO
HIM BY THE CONDUCT OF THE
PROMISOR HIMSELF, OF BY THE
CONDUCT OF ANY OTHER PERSON.
PERFORMANCE & RECOVERY OF
BENEFIT
S.66 - WHEN A CONTRACT IS VOID,
OR WHEN A CONTRACT BECOMES
VOID, ANY PERSON WHO HAS
RECEIVED ANY ADVANTAGE UNDER
THE CONTRACT IS BOUND TO
RESTORE IT, OR TO MAKE
COMPENSATION FOR IT, TO THE
PERSON FROM WHOM HE RECEIVED
IT.
CASE: LEHA BT. JUSOH V.
AWANG JOHARI
H:
THE COURT INVOKED S.66 TO
ORDER A REFUND OF THE
PURCHASE PRICE TO A MINOR
PURCHASER WHOSE CONTRACT
WAS DECLARED VOID.
CASE: TAN HEE JUAN V. TEH
BOON KEAT
H:
THE COURT MADE AN ORDER
DECLARING THE TRANSFERS VOID
ON ACCOUNT OF MINORITY BUT
REFUSED TO ORDER THE REFUND
OF THE PURCHASE PRICE PAID BY
THE DEFENDANT.
RATIFICATION OF VOID
CONTRACT
-RATIFICATION OCCURS WHEN A
PERSON CONFIRMS WHAT HE HAS
EARLIER PROMISED TO DO.
CASE:
ARUNASELAM CHETTY V. AZIZ KHAN
H:
THE CONTRACT BETWEEN THEM WAS
A FRESH CONTRACT RATHER THAN A
RATIFICATION OF A PREVIOUS
CONTRACT.
CAPACITY OF PERSON OF
SOUND MIND
S.11 - EVERY PERSON IS COMPETENT TO
CONTRACT.
S.12 - SOUND MIND - AT THE TIME OF
MAKING A CONTRACT, HE IS CAPABLE
OF UNDERSTANDING IT AND OF
FORMING A RATIONAL JUDGMENT.
A PERSON USUALLY SUFFERS FROM
MENTAL DISORDER MAY MAKE A
CONTRACT WHEN HE IS SOUND.
CONT.
CONVERSELY, A PERSON WHO IS
USUALLY SOUND MIND, BUT
OCCASIONALLY OF UNSOUND
MIND, MAY NOT MAKE A
CONTRACT WHEN HE IS OF
UNSOUND MIND.
THE ACT DOES NOT SPECIFY IF
THE CONTRACTS ARE VOID OR
VOIDABLE.
CORPORATIONS
CORPORATIONS AND COMPANIES
ARE ARTIFICIAL PERSONS
CREATED BY SPECIAL AUTHORITY
OR REGISTERED UNDER SPECIFIC
LAWS.
STATUTORY CORPORATIONS ARE
ESTABLISHED BY ACTS OF
PARLIAMENT OF ENACTMENTS OF
STATE ASSEMBLIES.
CONT.
THEIR POWERS ARE IN THE
STATUTES WHICH THEY ARE
CREATED.
COMPANIES - GOVERNED BY THE
COMPANIES ACT.
INCORPORATION GIVES THE
COMPANY A LEGAL EXISTENCE
SEPARATE FROM ITS MEMBERS.
CONT.
A COMPANY SO INCORPORATED
OPERATES WITHIN THE LIMITS OF
THE OBJECT CLAUSES FOUND IN
THE MEMORANDUM OF
ASSOCIATION AND ARTICLES OF
ASSOCIATION.
IF THE COMPANY CONTRACTS
OUTSIDE THOSE LIMITS, IT
BECOMES ULTRA VIRES.