CERTAINTY

Sec 30 CA: Agreement, the meaning of which

is not certain, or capable of being made
certain, are void.
Issues of certainty-
Language used too vague.
Fail for incompleteness.
Case: Karuppan Chetty v. Suah Thian
(1916) 1 FMSLR 300
The contract that allowed one of the parties to
rent a premise for $35 a month as long as he
likes was held void.
Held: There was no certainty.

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 LEGAL CAPACITY

MINOR

LEGAL CAPACITY

UNSOUNDMIND

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 MINOR
Age of Majority Act 1971 provides that a person
attains the age of majority at 18. A person under this
age is considered to be a minor.
Sec 10(1) CA- All agreements are contracts if they
are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful
object, and are not hereby expressly declared to be
void.
Sec 11 CA- Every person is competent to contract
who is of the age of majority according to the law to
which he is subject, and who is of soundmind, and is
not disqualified from contracting by any law to which
he is subject.
Contract entered into by incompetent parties is void.
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 All contracts entered into by minor are void.
Void ab initio.
This is because to protect the minor against
consequences of his own actions and presumed lack of
judgment.
Therefore, a minor cannot be made liable upon the
contract. The contract cannot be enforced against
the minor. The other party of the contract cannot
sue the minor for breach of contract.
Similarly, the minor also cannot enforce the contract
and cannot sue the other party for breach for
contract, if he himself was still a minor at the time
the contract was made.

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 EXCEPTIONS TO THE
GENERAL RULE
The capacity of any person to act in
matters relating to marriage. A promise
of marriage entered into by minors or
their parents on their behalf is valid.

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The contract was binding, as the contracts of promise of marriage
entered into by minors are valid.
The minor is liable in contracts for necessities.
Case: Nash v. Inman (1908) 2 KB 1
Plaintiff had supplied to the defendant clothing to the value of 145 at
a time when the defendant was a Cambridge student. The clothes
supplied included 11 fancy waistcoats. Plaintiff claimed for the payment
from the defendant. The defendant contended that at the time the
clothes were supplied to him, he was still a minor and that the clothes
were not necessaries. Furthermore, it was provided that the defendants
father had amply supplied the defendant with proper clothes according to
his condition in life.
Held: The clothes supplied to the defendant were not necessary
to the defendants actual requirement because the defendant was
sufficiently supplied with suitable and necessary clothes by his
father. Therefore, the defendant was not bound to the contract.

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Case: Government of Malaysia v. Gurcharan
Singh & Ors (1971) 1 MLJ 211

The plaintiff sued the defendant for breach of contract. The

claim was $11500-alleged to be the sum actually spent by the
government in educating the first defendant. At the time of
the contract, the defendant was a minor. The first defendant
now had served the government for three years and ten months
out of the contractual period of five years. Thus, it was
pleaded by the defendants that the claim for $11500 was
excessive and not a reasonable compensation.
Held: Education was necessaries, thus the first defendant was
liable for the repayment of a reasonable sum spent on him. The
plaintiff was awarded, however, $2683 as the amount of
damages payable based on the defendants completed months of
service.

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Held: Education was necessaries, thus the
first defendant was liable for the repayment
of a reasonable sum spent on him. The plaintiff
was awarded, however, $2683 as the amount
of damages payable based on the defendants
completed months of service.

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 Scholarship
Sec 4(a) Contracts (Amendment) Act 1976-A scholarship
entered into by a minor is a valid contract.

Insurance
Insurance Act 1963 (Revised 1972)-A minor over 10
years may enter into a contract of insurance but if under
the age of 16 years must have written consent of the
parents/guardian.

Apprenticeship
Children and Young Persons (Employment) Act 1966-
Contract of apprenticeship of service is a necessaries.

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 CAPACITY OF PERSON OF
SOUNDMIND
Basis of contract-Meetings of mind + Free consent
Sec 10 CA.
Sec 11 CA-Person of soundmind is competent to
contract.
Sec 12(1) CA-Soundmind at the time when a person
makes a contract, he is capable of understanding it
and forming a rational judgment as to the contracts
effects on his interest.
Sec 12 CA-Persons of mentally disorder and person
incapacitated through sickness, alcohol or drugs.

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 Effect-Contract is voidable at the option of
the person of unsoundmind if
The fact of mental disorder or intoxication can
be proved;
The other party knows of his condition.

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 FREE CONSENT
Free consent is the basis of a contractual relationship.
Sec 10(1) CA- All agreements are contracts if they are made
by the free consent of parties competent to contract
Sec 13 CA- Two or more persons are said to consent when
they agree upon the same thing in the same sense.
Sec 14 CA-Consent must be free. It is said not to be free if
caused by-
(1) Coercion (Sec 15 CA);
(2) Undue Influence (Sec 16 CA);
(3) Fraud (Sec 17 CA);
(4) Misrepresentation (Sec 18 CA);
(5) Mistake (Sec 21-23 CA).

If one of the factors which are mentioned under Sec 14 CA,

exists in the agreement, the consent is said to have been given
not freely and voluntarily. Therefore, the contract may become
void or voidable.

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 VOID OR VOIDABLE CONTRACTS?
Void-Not valid (Sec 2(j) CA).
No rights given to the parties and no obligations
imposed on them.
The contract cannot be enforced at all, even by the
court.

Voidable-Valid until rescinded (Sec 2(i) CA).

One of the parties is given a choice either to continue
the contract or to discontinue with the contract.
The agreement is valid and binding, until the party
who is entitled to rescind the contract chooses to
rescind it.
If that party chooses to rescind, then the contract is
no longer valid and binding upon the parties.

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 ELEMENTS THAT MAY AFFECT THE
FREE CONSENT
1.Coercion (Sec 15CA)
The effect of the contract is voidable-Sec 19(1) CA.
Case: Chin Nam Bee Development Sdn Bhd v. Tai
Kim Choo & 4 Ors
Respondents purchased houses to be constructed by
the appellant. Each of the respondents had signed a
contract to purchase a house at $29500. However,
the respondents were forced later to pay an additional
$4000 under a threat by the appellant to cancel the
respondents booking for their houses.
Held: The payment was not voluntary but had been
made under threat. Thus, there was coercion in the
agreement of paying the additional $4000 to the
appellant.

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2. Undue Influence (Sec 16 CA)
The effect of Undue Influence is voidable-
Sec 20 CA.
Two elements of Undue Influence-
(i) The domination of the will by one party over
the other;
(ii) Obtaining an unfair advantage.

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3. Fraud (Sec 17 CA)
Case: Derry v. Peek

Elements of fraud-
i) There must be a false representation/statement;

ii) The representee must have relied on the

representation;

- Otherwise the misrepresentation is irrelevant.

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Case: Letchemy Arumugan v. Annamalay
Defendant had made a fraudulent misrepresentation to
the plaintiff, an illiterate Indian woman rubber tapper and
induced her to enter into a Sale and Purchase Agreement.
The defendant had fraudulently represented to the
plaintiff that the document she was required to sign was
for a loan that she had taken and to free the land from
the charge. In fact, the documents she signed included a
sale agreement of the land.
Held: The agreement was voidable at the option of the
plaintiff.
Burden of proof-It is on the party who claims that there
is fraudulent misrepresentation, to prove all the elements
of fraud. Otherwise the contract cannot be rescinded.

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 Effect of fraud in a contract-Voidable (Sec 19(1)
CA)

Does silence constitute fraud?

The general rule is silence does not constitute

fraud.

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4. Misrepresentation-Sec 18 CA.
False statements made by the representor and which
induce the other party to enter into the contract.
However, such false representation was not made with
the intention to deceive.

Elements of misrepresentation-
There must be a false representation, either through
a positive statement or some conduct.
The representation must be one of fact, not a more
expression of opinion.
The statement was addressed to the party misled.
The representation must induce the misled party to
enter into the contract.

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 Remedies as to Misrepresentation-

Sec 19(2) of CA-Right to affirm the contract

and put it in the position on which he would
have been if the representations made had
been true.

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5. Mistake-Sec 21 of CA.
Elements of Mistake:
The mistake must be made by both
parties (mutual mistake);

The mistake is relating to a matter of

fact essential to the agreement.
Mistake of fact may occur in the
following circumstance-

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Case: Raffles v. Wichelhaus

Two parties contracted for a sale of a

cargo of cotton arriving in London by a
ship called The Peerless, sailing from
Bombay. But unknown to both parties,
there were two ships of the same name
leaving from Bombay at different times.
They were both negotiating under a
mistake and had in mind different ships.
Held: The contract was void for mutual
mistake.

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 Mistake as to the possibility of performing the
contract.
Case: Sheikh Brothers v. Ochsner
The appellant granted to the respondent licence
and authority to cut and manufacture all sisal
growing on 5000 acres of land in Kenya and to
deliver to the appellant 50 tons per month of sisal
fiber for sale. Respondent was then unable to do
so as the leaf potential of the sisal was not
sufficient to produce that much.
Held: It was a mistake as to the possibility of
performing the contract. The agreement was void.

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 Effect of mutual mistake in a contract, the
contract cannot be enforce at all and void-Sec
21 of CA.

Effect of unilateral mistake, it does not affect

the validity of a contract because a person is
expected to take reasonable care to ascertain
what he is contracting about. The contract is
valid.

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 LEGALITY OF THE OBJECTS

Sec 24 of CA-Considerations and objects which

are lawful and not.

REQUIRED FORMALITIES
Sec 10(2) of CA-Nothing herein contained
shall affect any law by which any contract is
required to be made in writing or in the
presence of witnesses, or any law relating to
the registration of documents.

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 DISCHARGE OF CONTRACTS

When a contract is discharged, it means the contract

is terminated.
Once discharged, the contracting parties are free
from further obligations under the contract.
Contract may be discharged by-
By performance of the contract; or
By consent or agreement between the parties of the
contract; or
By impossibility of performance (Doctrine of
Frustration); or
By breach of contract by anyone of the parties.

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 REMEDIES
If there is a breach of contract, the party not in
default may claim one or more of the following
remedies-

Rescission of contract
If a party breaches his promise under a contract,
the party not in breach has the right to
rescind/terminate the contract-Sec 40 CA.
If the party not in default chose to rescind the
contract, any benefit which he has received from
the defaulted party must be restored-Sec 65 and

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 Damages
Is granted to a party as compensation for the damage,
loss or injury suffered due to a breach of contract-Sec
76 and Illustration.

Specific Performance
Is an order of the court to the party at fault to carry
out the contract according to its terms.
This remedy is given at the discretion of the court.

Injunction
Is a courts order to restrain the doing, continuance or
repetition of some wrongful conduct, which is against the
contract. Granted at the discretion of the court.

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 Quantum Meruit
Is a claim for reasonable remuneration for work
done or services supplied under the contract, in
the event of breach of contract.

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