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Voidable ContractSection 10: What agreements are
contractsSection 11: Who are competent to contractSection 12: What
is a sound mind for the purposes of contractingSection 13:
ConsentSection 14: Free consentSection 15: CoercionSection 16:
Undue influenceSection 17: FraudSection 18:
MisrepresentationSection 19: Voidability of agreements without free
consentSection 20: Power to set aside contract induced by undue
influenceSection 21: Agreement void where both parties are under
mistake as to matter of factSection 22: Effect of mistake as to
lawSection 23: Contract caused by mistake of one party as to matter
of factCAPACITY TO CONTRACT27/6/20152CAPACITYEvery person who is
competent to contract is free to contract upon such terms which he
may think fit.But there are some limitations.MinorInsane
PersonBankrupts.
27/6/20153Section 10 (1):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.
27/6/20154Malaysia : Section 11Who are competent to
contract?
Every person is competent to contract who is of *the age of
majority according to the law to which he is subject, and *is of
sound mind, and *is not disqualified from contracting by any law to
which he is subject
27/6/20155Section 11 Does not expressly stipulate the effect of
contract entered by incompetent party.Indian Case: Mohori Bibee v
Dhurmodas Ghose (1903) I.L.R 30 Cal 539 :PC : Effect of section 10
& 11 of Indian Contract Act in pari materia to sections 10
& 11 of the Malaysia Contract Actrendered the contracts void.
27/6/20156Mohari Bibee v Dhurmodas Ghose (1903) 30 Cal
539Respondent : a minor executed a mortgage in favour of a money
lender Dutt : to secure a repayment of RS20,000 at 12% interest on
some land belong to the Resp.Entire transaction was executed by
Dutts attorney, Kedar Nath : he had knowledge that the respondent
was still a minor.Infant by his mother & guardian commenced an
action for a declaration that the mortgage was void and
inoperative27/6/20157JudgmentPrivy Council : Considered the effect
of contract entered by minor. Dismissed the appeal . Indian
Contract Act makes it essential that all contracting parties should
be competent.Expressly provide that a person by reason of infancy
is incompetent to contract.The contract entered into by the
respondent in this case is void.
27/6/20158Provisions involved1) Section 2 of Indian Contract Act
:(e) every promise and every set of promises, forming the
consideration for each other, is an agreement;(g) an agreement not
enforceable by law is said to be void;(h) an agreement enforceable
by law is a contract;(i) an agreement which is enforceable by law
at the option of one or more of the parties thereto, but not at the
option of the other or others, is a voidable contract27/6/201592)
Section 10 (1) of the Indian Contract Act 1872 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.27/6/2015103)
Section 11 of the Indian Contract Act 1872Every 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 sound mind, and is not
disqualified from contracting by any law to which he is
subject.27/6/201511According to his Lordships Looking at these
sections, their Lordships are satisfied that the Act makes it
essential that all contracting parties should be competent to
contract and expressly provides that a person who by reason of
infancy is incompetent to contract cannot make a contract within
the meaning of the Act.27/6/201512Effect of the decisionRendered
all contracts entered by infants to be void27/6/201513Position
under English LawBased on two principles:
1) the law must protect the minor against his experience
2) The law should not cause unnecessary hardship to adults who
deal fairly with minor27/6/201514English LawA contract entered by a
minor is either valid OR voidable.Valid :if SM are
necessariesVoidable at the minors option : if SM are not
necessaries.The Minors Contract Act 1987.27/6/201515English
LawVoidable in two sensesContract in which minors acquired interest
of a permanent and continuous in natureContract not continuous in
nature : not binding unless he ratified them within reasonable time
after majority.27/6/201516Cases in MalaysiaTan Hee Juan v The Boon
Keat [1934] MLJ 96Hereford J : The Privy Council have held that the
effect of sections 10 and 11 of the Contract Act of India is that
an infant cannot make a contract within the meaning of the Act and
that a contract made by an infant is not only voidable but also
void.. The decision of the PC is binding on this court, and
therefore there can be no doubt that those transfer are
void.27/6/201517Cases in MalaysiaLeha Jusoh v Awang Johari [ 1978]
1 MLJ 202Appellant : an adminitratixRespondent :
minor.27/6/2015181) MinorA person who has not reached the age of
majorityAge of Majority Act 1971 : 18 yearsAll contracts entered by
minor shall be void.Served as protection for minor against any
consequences of its own action
27/6/201519Exceptions;1) the capacity of any person to act in
matters relating to marriage, divorce, marriage, dower and
adoption2) The religion and religious rites and usages of any class
of person within Malaysia3) any other written law fixing the age of
majority27/6/201520Necessaries
- where a minor enters into a contract of necessaries, eg for
food, clothing, medical services and educationSection 69 : If a
person, incapable of entering into a contract, or anyone whom is
legally bound to support, is supplied by another person with
necessaries suited to hiscondition in life, the person who has
furnished such supplies is entitled to be reimbursed from the
property of such incapable person.27/6/201521Necessaries
Word necessaries was not defined in the Contract Act.Under
section 69 : what is supplied must be suited to the minors
condition in life.27/6/201522Government of Malaysia v Gucharan
Singh & Ors [ 1971] 1 MLJ 211Validity of a scholarship
agreement entered by minor with Government of Msia.Chang Min Tat :
Definition of necessaries :In my view, the word necessaries must be
construed broadly and in any decision involving whether what are
supplied are or are not necessaries, it is incumbent to have
regards to the facts of the case, the conditions and circumstances
in which the supply was made and the purpose which is
served,27/6/201523A minors liability to pay for necessaries
supplied under section 69 does not arised from contract.However,
the provision for professional or vocational trainign for the minor
in a Teachers Training Institution to enable him to qualify for and
accept the appointment as teacher is a provision of
necessaries.27/6/201524ScholarshipsSec 4 (a) Contract Amendment Act
1976Notwithstanding anything to the contrary contained in the
principal act, no scholarship agreement shall be invalidated on the
ground that(a) the scholarship entering into such agreement is not
of the age of majority(b) Such agreement is contrary to any
provisions of any law in force relating to money lenders(c) such
agreement lacks consideration
27/6/2015Dr. Zuraidah Ali25ScholarshipsSection 5 : Remedy in the
event of breach27/6/201526Necessary GoodsSection 2 of English SOGA
1893 : goods suitable to the condition in life of such and infant
and to his actual requirements at the date of sale and
delivery.Nash v Inman [1908} 2 KB 127/6/201527Contract of
Employment1) The Employment Act 19552) the Children and Young
Persons (Employment) Act 1966Section 13 : any child or young person
shall be competent to enter into a contract of service under this
Act other wise than as an employer and may sue as plaintiff without
his next friend or defend any action without a guardian ad
litem.27/6/201528Marriage ContractException to the general
ruleRajeswary v Balakrishnan (1958) 3 MC 178 : a contract to marry
entered into by minor are distinguishable form other classes of
contract and do not come with the principle laid down in Mohari
Bibee27/6/201529Section 4 (a) of the Age of Majority Act 1971
nothing in the Act shall effect the capacity of any person to act
in the following matters, namely marriage, divorce, dower and
adoption.27/6/201530
