Capacity - contract PDF

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LAW OF CONTRACT 1GLUPCAPACITYNor Anita AbdullahSEM 1, 2020/2021Prepared by :
 CAPACITY OF PARTIES#######  One of the elements of valid contract – S.#######  Meaning – party must be of age of majority and have####### sound mind – S.#######  If this element is absent, contract is void – Mo...

Description

LAW OF CONTRACT 1 GLUP1053 CAPACITY Prepared by : Nor Anita Abdullah SEM 1, 2020/2021

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CAPACITY OF PARTIES  One of the elements of valid contract –  Meaning – party must be of –

 If this

and have

, –M (1903) I.L.R. 30 Cal. 539

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EFFECT OF AN AGREEMENTS ENTERED BY MINORS: 

to enter into a valid contract

 Cases:  Tan Hee Juan v The Boon Kiat  Gov of M’sia v Gurcharan Singh  Leha bte Jusoh v Awang Johai bin Hashim

 All and

–

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

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WHO IS MINOR

There is no provision in the Contracts Act 1950 regarding ‘minor’. 1. Refer to the old. 2.

years old – is a

3. As

, they are

1971 – in

–

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



–

does

1971.

the

 [1934] MLJ 96  A minor transferred his land to B (adult) worth RM20K.  Ct: the contract was void.

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Effect of

–

Indian law:  Adopted from the – :  All  Case:

and

which

with

. (1903) I.L.R. 30 Cal. 539

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English law: 

Based on 1.

: which an

of them 2.

by entering a contract with them

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Effect:  V d – if  or 

- if

.

– (

1874 )–

.

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THE CONTRACT IS TREATED AS VOIDABLE IN TWO 1.

in of a t or  valid and binding on the minor until he repudiates it whether during the minority or within reasonable time after the majority

2. The contract are not continuous in their operation  not binding unless the minor ratified it within reasonable time after attaining the majority eg: promise by a minor to pay for non necessaries good supplied to him done at his request – where it requires express ratification

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 

 







 

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1. MARRIAGE CONTRACT 1.

Promise of marriage entered by minors/ their parents – valid. Case: Rajeswary & Anor v Balakrishnan & Ors (1958) 3 MC 178

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For Muslim law – various Islamic enactments of the states in Malaysia provides remedies for breach of promise to marry.

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S4(a) Age of the Majority Act 1971 – nothing shall effect the capacity of the minor in the following matters such as: marriage, divorce, dower and adoption - minor can sue and be sued fro breach of promise to marry

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2. CONTRACT FOR NECESSARIES 2.

Contracts for necessaries – valid. E.g. clothes, shelter, education, food, services and medical aid.

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Necessaries: neither defined in the Act nor under the Sale of Goods (Malay state) Ordinance 1957

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Necessaries – SUITABLE to minor’s lifestyle and NEEDED by him.

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       

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Reimbursement for necessaries by minor

S.69 – allows a person who has supplied necessaries to the minor to be reimbursed from the minor’s property. S.69 – minor is bound to pay for necessaries.

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Necessary goods:  English Sale of Goods Act 1893 – s2 1.The condition in the life of the infant 2.His actual requirements at the time of the sale and delivery  Case: Nash v Inman [1908]2 KB 1  A loan money to a minor to pay for necessaries is not recoverable

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Necessary services:  Includes education, medical and legal aid/advice  Case: Chapple v Cooper  The ct held that the provision of the funeral for the minor deceased husband was a necessary

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4. INSURANCE

Contract of insurance – 10 years old minor between 10 and 16 must obtain parents/guardian/s consent Insurance Act 1963 (Revised 1972)

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5. APPRENTICESHIP  The Employment Act 1955 and the Children and Young Persons (Employment) Act 1966 enable a minor to enter into a contract of service or apprenticeship  A child is defined – at the age of 14 – 16.  - As a means of live earning  - Beneficial for the minor when the contract is made  Case: Clements v London and North Western Rly  If the service is whole harsh and oppressive, a minor will not be bound but if not – the will be bound by it.

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Can a property transferred under a minor’s contract be recovered?

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 Indian case: Mohari Bibee’s case – the PC held that a contract with a minor not only cannot be enforced, but a property transferred also cannot be recovered  If money was lent – an adult cannot recover  if an adult lent money to a minors, it is an advantages to a minor not to return the money received.

 S.65 of Indian Contract Act in pari materia with S.99 Contracts Act 1950…’starts form the basis that any contracts between a parties competent to a contracts with a minor could never been any contract’.  S. 66 is inapplicable in the case of minor

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Obligation of person who has received advantage under void agreement, or contract that becomes void Section 66. When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.

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However, in the case of Leha bte Jusoh v Awang Johari bin Hashim • FC applied s.66 - agreement was void between adult and minor • Ordered refund the purchase price to the minor on condition the minor should vacate the land • Enables the minor to recover the money paid upon returning the property transferred to him

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In England, a contract by a minor which is not binding on him, he cannot recover the money paid if he already received the benefits from the contract.

 Case: Valentini v Canali  A minor took a lease of a house and agreed to pay a landlord 102 pound for the furniture – he gave 68 pound and promissory note for the balance  After a few months – he took proceedings to get the lease set aside and to recover the money already paid  The ct ordered the cancellation of the lease and the delivery of the promissory notes but for the 68 pound that has paid has precluded the minor from recovering them  Reason: when an infant has paid for something ad has consumed or used it, it is contrary to natural justice that he should recover the money that he has paid – can only recover if there is total faiure.

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If the minor is yet to use it, he may recover the money back

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Available cases:  Valentini v Canali  Tan Hee Juan v The Boon Keat

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Query? If minor has misrepresented his age, can he still avoid the contract by pleading minority?

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 Natesan v Thanaletchumi – a minor misrepresented another party to a contract has a right to terminate/cancel/avoid the contract by pleading minority.

 Mohamed Syedol Arifin v Yeoh Ooi Gark – no action can be taken against the minor who misrepresented his age.

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RESTITUTION  S66 of the CA  When an agreement is discovered to be void, or when contracts becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.

 Where a contract is void, justice normally will demand for restoration of property received or if that is not possible , appropriate compensation –  Specific Relief Act – s37  Leha Jusoh v Awang Johari Hashim  R Leslie Ltd v Shields – pf who was an adult at the time cannot recover the loan from the df (minor who misrepresented his age) – ct held the contract be void.

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Summary English law:  equity developed a principle that requires the infant who had misrepresented his age to return the benefits that he has received which are still in his possession  This remedy called restitution Indian law: (Fifth Indian Commission)  A minor has to return to the adult his ill-gotten gains Thus, if a minor obtains property, whether consisting of goods or money or any other security, by means of false representation of full age, the ct can compel him to restore that property to the person deceived – as long as the good remains in his possession.

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UNSOUND MIND  S11 – ‘every person must be competent to contract’ – which means only who is sound mind can enter into a valid contract.  Sound mind – capable of understanding and forming a rational judgment as to the contract and its effect.  Permanent or temporary.  Mental disorder, influenced by drugs/alcohol.

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 Che Som Yip v Maha PL  S’pore HC- the party (df) did not know that they were having a contract with the pf who was unsound mind when she signed the mortgage agreement. Therefore, the contract was valid.

 Imperial Loan v Stone  A contract made by a person of unsound mind is not voidable at the party’s option if the other party to the contract believed at the time he made the contract that the person with whom he was dealing was sound mind.

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Burden of proof 

Unsound person cannot perform a valid contract – the contract would be void

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Effect – contract is voidable at the option of the person of unsound mind if unsoundness can be proven and the other party knows of it.

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Case: Sim Kon Sang Peter’s    

Pf claimed in his capacity as the administrator of the estate of the deceased against the df Pf claimed that the deceased when she was alive transferred her property when she was as the df knew of unsound mind Ct: english common law applied as CA 1950 has yet come into force Transfer was not void but voidable if the df knew that at the time of the transfer that the deceased was unsound mind but the ct found that the deceased appeared normal to the df and df was not aware that deceased was unsound

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