contract 1_contract by minors

CONTRACT BY MINORS

DR. SONNY ZULHUDA

INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

<Dr. Sonny Zulhuda> 2

OUTLINEContract by MinorsExceptional Circumstances


Contracts by minors“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.”

Section 10(1) Contracts Act 1950 (Act 136)


Contracts by minorsWho 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 who is of sound mind, and is not disqualified from contracting by any law to which he is subject.

Section 11 Contracts Act 1950


Age of Majority Act 1971 (Act 21)Section 2: Subject to section 4, the minority of all males and

females shall cease and determine within Malaysia at the age of eighteen years and every such male and female attaining that age shall be of the age of majority.

Section 4: Nothing in this Act shall affect—

a) the capacity of any person to act in the following matters, namely, marriage, divorce, dower and adoption;

b) the religion and religious rites and usages of any class of persons within Malaysia;

c) any provision in any other written law contained fixing the age of majority for the purposes of that written law.


The effect of contracts by MinorsThe court held that the effect of sections 10

and 11 of the Contracts Act 1950 render all such agreements void.

Tan Hee Juan v Teh Boon Kiat (1934)Govt. of Malaysia v Gurcharan Singh (1971)Leha bte Jusoh v Awang Johari bin Hashim

(1978)


Leha bte Jusoh v Awang Johari bin Hashim (1978)

R (minor) had alleged that he had entered into an agreement for the purchase of certain lands belonging to an estate of which the appellant was the administratrix.

The learned trial judge held that the agreement was void but he went on to hold that the purchase price having been paid in full and the respondent let into possession, a constructive trust had been created and the deceased held the lands in trust for the respondent.

The appellant appealed.



Fed Ct. followed Privy Council’s decision:

“The Privy Council in Mohori Bibee v Dhumodas Ghose 30 IA 114 ruled that "the (Indian Contracts) Act makes it essential that all contracting parties should be competent to contract" and specifically enacts that a person incompetent to contract by reason of infancy cannot make a contract within the meaning of the Act. Our Contracts Act, 1950 is in pari materia with the Indian Contracts Act.”



Fed Ct. allowed the appeal:

to import a constructive trust in this case and that the R was entitled to possession of the lands was in effect to enforce an agreement which was void ab initio;

the purchase price to be repaid to the minor and the minor shall vacate the land.


Exceptional CircumstancesContract for necessariesContract of services Contract of scholarshipContract of marriage*


Contract for necessariesClaim for necessaries supplied to person

incapable of contracting, or on his account.

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 property of such incapable person.

Section 69 Contracts Act 1950


What are ‘necessaries’?“What decisions there are of what constituted

necessaries cannot be of any great assistance as the cases were clearly decided on their peculiar facts, and the circumstances of the infant’s life and needs.”

“The word must be construed broadly and in any decision involving whether what are supplied ar or are not necessaries, it is incumbent to have regard to:the facts of the case; the conditions and circumstances in which the supply

was made, and; the purpose which is served.”

Govt. of Malaysia v Gurcharan Singh (1971)


Govt. of Malaysia v Gurcharan Singh (1971)The Government sued the D (minor) for breach of

agreement in writing entered into by both P and D for providing a course of training at a Malayan Teacher's Training Institution.

The claim was for $ 11,500 alleged to be actually spent by the Government for educating the first defendant.

The issues:Was there a valid contract?Can the P claim the payment based on breach of contract?Can the P reimburse it under “necessaries” in s. 69?


Govt. of Malaysia v Gurcharan Singh (1971)Held, inter alia;

The contract entered into by P & D was void as D was an infant at the relevant time;

The word "necessaries" must be construed broadly and in the circumstances of this case, the provision of professional or vocational training for the D in a Teacher's Training Institution to enable him to qualify for and accept appointment as a teacher was a provision for necessaries;

D was therefore liable for the repayment of the sum expended for his education and training as being expended on necessaries.


The Current Position for Scholarship contracts: Contracts (Amendment) Act 1976Section 4. Validity of scholarship agreement.

Notwithstanding anything to the contrary contained in the principal Act, no scholarship agreement shall be invalidated on the ground that (inter alia) -

(a) the scholar entering into such agreement is not of the age of majority


Children and Young Persons (Employment) Act 1966 (Act 350)Section 13. Contractual capacity.

Notwithstanding anything to the contrary contained in the Contracts Act 1950 [Act 136] or the provisions of any other written law, 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.


Children and Young Persons (Employment) Act 1966 (Act 350)Section 2(2) A child may be engaged in any of the following

employments:

employment involving light work suitable to his capacity in any undertaking carried on by his family;

employment in any public entertainment, in accordance with the terms and conditions of a licence granted under this Act;

employment requiring him to perform work approved or sponsored by the Federal Government or the Government of any State and carried on in any school, training institution or training vessel; and

employment as an apprentice under a written apprenticeship contract approved by the Director General with whom a copy of such contract has been filed.


Children and Young Persons (Employment) Act 1966 (Act 350)Section 2(3) A young person may be engaged in any of the

following employments:

any employment mentioned in subsection (2);

employment as a domestic servant;

employment in any office, shop (including hotels, bars, restaurants and stalls), godown, factory, workshop, store, boarding house, theatre, cinema, club or association;

employment in an industrial undertaking suitable to his capacity; and

employment on any vessel under the personal charge of his parent or guardian:


Marriage of a MinorBefore the passing of the Age of Majority Act, the Court in Rajeswary v Balakrishnan (1958) 3 MC 178, held the contracts are distingusihable from other classes of contract and allowed an action based on such contract.


Recovery of property transferred to a MinorSection 65. Consequences of rescission of

voidable contract.

When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he has received any benefit thereunder from another party to such contract, restore the benefit, so far as may be, to the person from whom it was received.


Recovery of property transferred to a MinorSection 66. Obligation of person who has

received advantage under void agreement, or contract that becomes void.

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.


Recovery of property transferred to a MinorMohori bibee v Dhurmodas Ghose (1903)

One cannot use ss. 65-66 to recover from his agreement with a minor!

Tan Hee Juan v The Boon Keat (1934)Ct has discretion to order the recovery using s.41 of

Specific Relief Act 1950 (as justice may require)

Leha bte Jusoh v Awang Johari bin Hashim (1978)Ct allowed s.66 to order a minor recovers his money


Specific Relief Act 1950 (Act 137)Section 41. Discretion of court as to

declaration of status or right.

Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to the character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in that suit ask for any further relief:


Misrepresentation of Age by MinorMohamed Syedol Ariffin v Yeoh Ooi Gark

(1916)Privy Council held that the misrepresentation

in this case was not fraudulent and even it it was, there could not be any action against the appellant as he was still a minor.

R Natesa v K Thanaletchumi (1952)Court held there was no misrepresentation..

(Even if there was).. She is not estopped from pleading her infancy to avoid contract.

THE END

contract 1_contract by minors

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