Legal Capacity
(Competency)
1
Section 10(1) of the Contract Act
All agreements are contract if
they are made by free consent
of parties competent to contract.
2
1. Who is of the
age of majority
2. Who is of sound
mind
3. Who is not
disqualified
from
contracting by
any law
So, who are
competent to
contract?
SECTION 11
3
Based on the Age of Majority Act 1971
That all person in Malaysia attain of majority
at 18 years old
A person below 18 years old will
be known as ‘minor’ or ‘infant’
4
Cases: Mohori Bibee v Dhurmodas Ghose
Tan Hee Juan v The Boon Keat
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Case:
Tan Hee Juan v The
Boon Keat
The plaintiff was a minor entered into the agreement with the
defendant. The plaintiff has transferred his land to the
defendant and after that, the defendant has paid the price for
the land. Later on, the plaintiff took legal action and claimed
that the above said agreement should be considered as void
since he was a minor at the time he transferred the land.
The court held that the agreement between the plaintiff and
defendant should as void since the plaintiff was a minor.
6
Exceptions on the above mention rule
Contracts for necessaries
Contracts for the minor’s benefit
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Contracts for necessaries
Contracts for ‘goods suitable to the condition in life of the minor
and to his actual requirements.’
In any legal action, therefore, the
courts will have to decide whether
the goods in dispute are, as matter
of fact, necessaries for that
particular minor having regards to
his ‘condition in life(or status or
standard of living
The next question to be considered is
whether , even though the goods may
be ‘necessaries’ in themselves, the
minor is in fact already plentifully
supplied with the goods; for one must
connect the word’ ‘necessaries’ with
the minor’s ‘actual requirements’ at
the time of sale and at the time of
delivery, where these time are
different.
8
Section 69 0f the Contracts Act, 1950
‘ If a person, incapable of entering into a contract, or
anyone whom he is legally bound to support, is supplied
by another person with necessaries suited to his condition
in life, the person who has furnished such supplies is
entitled to be reimbursed from the prorperty of such
incapable person.
9
Educational
books
Examples of
necessaries
food
Medical
attention
clothing
10
Plaintiff was Savile Row tailor. The
plaintiff sued the defendant for the
sum.
The defendant an undergraduate of
Trinity College, Cambridge, who was
under 21, ordered clothes(including 11
fancy waistcoats)Def’s father , an
architect, proved that his son was
already supplied with adequate clothes
suitable to his condition in life when the
clothes made by plaintiff were
delivered.
That in view of these facts, the plaintiff’s
clothes were not ‘necessaries’ and
accordingly the action failed
Nash
v
Inham
11
The Court held that even
though Gurcharan Singh
was a minor, he was
required to pay back money
to the plaintiff due to the
plaintiff able to show to the
Court that educational is
necessaries to the defendant
Government
of Malaysia
v
Gurcharan
Singh & Ors
12
Contracts for the minor’s benefit
The question of what is ‘for the minor’s benefit’ is one
for the court to decide from the particular facts of each
cases
Decided cases show that contract
of apprenticeship, training or
education fall within this class
13
contract of
apprenticeship
contract of training
contract of
educational
14
Doyle v White City Stadium Ltd
D, an infant professional boxer, made a contract
with the British Boxing Board of Control. A term
in the contract provide that if D were disqualified
for certain reason, the prize money would be
withheld. D fought a contest and was
disqualified. He sued the Board to recover
money, contending that due to his infancy he
was not bound.
That D’s action must fail. The
agreement was closely
analogous to a contract of
employment and the contract
was on the whole for his benefit,
15
Exceptions on the above mention rule
Contracts of scholarship
Contracts of Insurance – Insurance Act
1963(Revised 1972)
16
Section 12 of the Contracts Act 1950
‘ a person is said to be of sound mind for the purpose of
making a contract if, at the time when he makes it, he is
capable of understanding it and of forming a rational
judgment as to its effect upon his interest.’
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Sickness
Section 12
includes
unsound
mind due to:
Alcohol
Drugs
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