Contract Law in Malaysia
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Questions and Answers

According to Section 115 of the Evidence Act 1950, what happens when a person intentionally misrepresents a fact, causing another person to act on it?

  • The person who acted on the misrepresented fact can sue for damages.
  • The person who misrepresented the fact cannot later deny the truth of their statement. (correct)
  • The person who acted on the misrepresented fact is legally obligated to uphold the agreement.
  • The person who misrepresented the fact is automatically liable for any losses incurred.
  • What is the exception to Section 115 of the Evidence Act 1950?

  • When the misrepresentation is discovered within a specific timeframe.
  • When the misrepresentation is made in writing.
  • When the misrepresentation is made by a minor. (correct)
  • When the misrepresentation is made in a business transaction.
  • What is the legal principle that allows a minor to avoid a contract despite misrepresenting their age?

  • Doctrine of minority. (correct)
  • Estoppel by representation.
  • Doctrine of necessaries.
  • Doctrine of undue influence.
  • In the case of Mahomed Syedol Ariffin v Yeoh Ooi Gark, what was the court's decision regarding a minor's misrepresentation of age?

    <p>The minor was allowed to avoid the contract despite their misrepresentation of age. (A)</p> Signup and view all the answers

    Which of the following is NOT a legal defense for a minor who wants to avoid a contract due to misrepresentation of age?

    <p>The minor's parent or guardian consented to the contract. (D)</p> Signup and view all the answers

    What are the employment restrictions placed on females aged 15-18 years old in hotels, bars, restaurants, boarding houses, or clubs?

    <p>They can only work in these places if their parent or guardian holds a management role within the establishment. (A), They can only work in clubs not managed by their parent/guardian with permission from the Director-General. (D)</p> Signup and view all the answers

    What does the Children and Young Persons (Employment) Act 1966 guarantee for minors regarding employment contracts?

    <p>It ensures that minors have the right to enforce their rights and obligations within the framework of their employment contracts. (C)</p> Signup and view all the answers

    According to the Employment Act 1955, what happens if a minor breaks an employment contract?

    <p>The minor is not liable for any damages or compensation related to the breach of contract. (C)</p> Signup and view all the answers

    Which of the following scenarios BEST illustrates the concept of 'sound mind' according to the Contracts Act 1950?

    <p>A person with a mental disorder signs a contract but demonstrates they fully understood the implications. (A)</p> Signup and view all the answers

    What is the general rule regarding contracts entered into by minors or persons of unsound mind?

    <p>These contracts are considered void from the beginning. (B)</p> Signup and view all the answers

    What does Section 40 of the Specific Relief Act 1950 provide in relation to void contracts?

    <p>It allows the court to compensate the other party for any loss incurred due to the void contract, if it deems it fair. (A)</p> Signup and view all the answers

    What type of relationship is critical for a court to order compensation under Section 40 of the Specific Relief Act 1950?

    <p>A fiduciary relationship where one party relies on the trust and confidence of the other party. (C)</p> Signup and view all the answers

    In the context of the content provided, what does the phrase 'void ab initio' mean?

    <p>A contract that is invalid and unenforceable from the moment it's created. (D)</p> Signup and view all the answers

    According to the Contracts Act 1950, what is the primary requirement for a party to be considered competent to enter a contract?

    <p>The party must possess the capacity to contract. (B)</p> Signup and view all the answers

    Which section of the Contracts Act 1950 outlines that a person is considered competent to contract if they are of the age of majority, of sound mind, and not disqualified by law?

    <p>Section 11 (A)</p> Signup and view all the answers

    What is the standard age of majority in Malaysia according to the Age of Majority Act 1971?

    <p>18 years old (C)</p> Signup and view all the answers

    According to the general rule in contract law, what is the status of contracts entered into by a minor?

    <p>Void ab initio (void from the beginning) (C)</p> Signup and view all the answers

    Which of the following is a specific exception to the general rule regarding the age of majority for contracts?

    <p>Marriage contracts (A)</p> Signup and view all the answers

    Under what condition can a marriage be valid in Malaysia if one party is under 18 years old, but over 16 years old?

    <p>With special permission (a license) from the Chief Minister (A)</p> Signup and view all the answers

    In the case of Rajeswary and Anor v Balakrishnan & Ors, what was the primary legal issue?

    <p>Breach of promise to marry (D)</p> Signup and view all the answers

    Which of the following best describes the term void ab initio?

    <p>Void from the beginning (D)</p> Signup and view all the answers

    Why was the transaction between the minor and the defendant considered void?

    <p>Minors cannot enter into valid contracts. (C)</p> Signup and view all the answers

    What discretionary power does the court have regarding the return of money received by a minor in a void transaction?

    <p>The court may require the money to be returned if there is a fiduciary relationship. (B)</p> Signup and view all the answers

    What is the significance of Section 66 of the Contracts Act 1950 in relation to minors?

    <p>It applies only to valid contracts made with adults. (B)</p> Signup and view all the answers

    In the case of the minor wanting to cancel the transaction, what was the outcome regarding the land?

    <p>The minor was allowed to cancel the transaction and recover the land. (A)</p> Signup and view all the answers

    Which of the following best describes a fiduciary relationship?

    <p>A relationship involving trust and responsibility. (C)</p> Signup and view all the answers

    Why did the court not require the minor to return the money received from the transaction?

    <p>There was no fiduciary relationship present. (B)</p> Signup and view all the answers

    What does the term 'void ab initio' indicate regarding contracts involving minors?

    <p>The contract is unenforceable from the beginning. (B)</p> Signup and view all the answers

    What precedent case is mentioned regarding minors and contract validity?

    <p>Mohori Bibee (D)</p> Signup and view all the answers

    What was the outcome of the case Mohori Bibee v Dharmodas Ghose regarding minor contracts?

    <p>The minor's contract was ruled void ab initio. (C)</p> Signup and view all the answers

    Under which conditions can Section 69 of the Contracts Act 1950 be applied?

    <p>The goods must be suitableness to the minor's economic condition. (D)</p> Signup and view all the answers

    What type of goods does Section 69 consider as necessaries?

    <p>Essential goods or services for life. (C)</p> Signup and view all the answers

    What was the moneylender's argument in the case of Dharmodas Ghose?

    <p>He should be reimbursed for the money lent. (B)</p> Signup and view all the answers

    Which of the following is NOT a requirement for the application of Section 69?

    <p>The minor must have consented to the agreement. (D)</p> Signup and view all the answers

    In the case of Leha bte Jusoh v Awang Johari bin Hashim, what was ordered by the Federal Court?

    <p>Repayment of the purchase price to the minor. (B)</p> Signup and view all the answers

    What is the primary purpose of Section 69 in the Contracts Act 1950?

    <p>To allow reimbursement for necessaries supplied to incapable persons. (B)</p> Signup and view all the answers

    Which of the following best defines 'necessaries' as per the context provided?

    <p>Essential items needed for a minor's well-being. (B)</p> Signup and view all the answers

    What is the legal status of marriage contracts entered into by minors according to the court?

    <p>They are valid and enforceable. (A)</p> Signup and view all the answers

    What does Section 4(a) of the Contracts (Amendment) Act 1976 state about scholarship agreements?

    <p>They are valid even if signed by a minor. (A)</p> Signup and view all the answers

    What defines a 'young person' under the Children and Young Persons (Employment) Act 1966?

    <p>Between 15 and 18 years of age. (C)</p> Signup and view all the answers

    Which employment is NOT permissible for children according to the Children and Young Persons (Employment) Act 1966?

    <p>Work as a domestic servant. (B)</p> Signup and view all the answers

    What ruling did the High Court provide in the case of Government of Malaysia v Gurcharan Singh & Ors concerning scholarship agreements before the 1976 amendment?

    <p>Scholarship agreements were void, but education expenses were recoverable. (A)</p> Signup and view all the answers

    What type of work is classified as permissible for young persons aged 15 to 18 under the act?

    <p>Work in offices, factories, or hotels. (C)</p> Signup and view all the answers

    What is required for employing a child under permissible conditions?

    <p>The work must be documented and filed with the Director-General. (C)</p> Signup and view all the answers

    Which of the following statements about minors and contracts is true?

    <p>Some contracts, like marriage and scholarship agreements, are valid. (B)</p> Signup and view all the answers

    Flashcards

    Capacity to Contract

    The ability of a person to enter into a legally binding contract.

    Contract

    A legal agreement that creates obligations enforceable by law.

    Minors and Contracts

    Contracts entered into by a person who is under the age of 18 in Malaysia are void from the beginning.

    Age of Majority in Malaysia

    The Age of Majority Act 1971 establishes 18 years as the age of majority in Malaysia.

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    Exceptions to Minor Contracts

    Exceptions to the general rule that minors cannot enter into contracts.

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    Marriage Contracts and Minors

    A contract related to marriage is considered valid even if one party is under 18.

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    Marriage Age in Malaysia

    A marriage in Malaysia is invalid if either person is under 18 years old.

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    Exceptions to Marriage Age

    The Chief Minister can grant special permission for girls aged 16 to 18 to marry.

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    Scholarship Contracts and Minors

    A scholarship agreement with a minor is valid, even if the minor is under 18 years old.

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    Scholarship Contracts & Minors (Pre-1976)

    A scholarship agreement with a minor was previously considered void due to the minor's lack of legal capacity.

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    Contracts (Amendment) Act 1976

    The Contracts (Amendment) Act of 1976 states that scholarship agreements with minors are valid.

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    Employment of Minors

    The Children and Young Persons (Employment) Act 1966 regulates employment of children and young persons.

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    Child (Employment Act)

    A person under 15 years old is considered a "child" in the context of employment.

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    Young Person (Employment Act)

    A person between 15 and 18 years old is considered a "young person" in the context of employment.

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    Permissible Employment: Children

    Light work within a family business is permissible for children under the Employment Act.

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    Sound Mind

    A person is considered to have sound mind if they can understand the contract and make a rational judgment about its impact on their interests.

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    Unsound Mind - Contracting in Sound Mind

    A person usually of unsound mind can enter into a contract if they are of sound mind at the time of contracting.

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    Sound Mind - Contracting in Unsound Mind

    Persons usually of sound mind cannot contract when they are of unsound mind.

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    Void Contracts - Minors or Unsound Mind

    Contracts involving minors or persons of unsound mind are usually void ab initio (from the beginning).

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    Compensation for Void Contracts

    A court can order the party who benefited from a void contract to compensate the other party if it is fair to do so.

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    Fiduciary Relationship for Compensation

    A fiduciary relationship is required to order compensation for a void contract, as was seen in the Tan Hee Juan v Teh Boon Keat case.

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    Court Power to Order Compensation

    If a court void an agreement, it can ask the benefiting party (usually the minor) to compensate the other party if it is just.

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    Loss Compensation for Void Contracts

    A court may order a minor to compensate the other party for a void contract if the other party suffered a significant loss due to the cancellation.

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    Misrepresentation and Estoppel

    A person who intentionally makes someone believe something false, and that person acts on it, cannot later deny the truth.

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    Minor's Exception to Misrepresentation

    Minors are exempt from this rule about not denying a false statement, even if they lied about their age.

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    Minors' Right to Avoid Contract

    Minors can avoid a contract, even if they lied about their age.

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    Minors can Plead True Age

    Minors can plead their true age in court, even if they lied previously.

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    Minors Can't Be Sued for Misrepresentation

    A minor cannot be sued for making a contract when they lied about their age.

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    Void Contract with a Minor

    A contract is void from the beginning, meaning it never existed legally. This is because minors lack the legal capacity to enter into agreements.

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    Court Discretion in Minor Contracts

    The court has the power to decide whether a minor should return money received from a contract. This happens only in very rare situations.

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    Fiduciary Relationship

    A relationship built on trust and responsibility, like the one between a parent and child.

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    Section 66, Contracts Act 1950

    This section of the Contracts Act 1950 states that anyone who benefits from a void contract should return those benefits. However, it doesn't apply to contracts with minors.

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    Void Ab Initio

    When a contract starts void, it never comes into effect. It's considered invalid from the very beginning.

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    Section 66 and Minors

    The principle in Section 66 doesn't apply to minors because their contracts were never valid in the first place.

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    Privy Council and Section 66

    The Privy Council, a high court in the UK, stated this Section doesn't apply to situations where a contract wasn't valid from the start.

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    Section 66 and Impossible Contracts

    Section 66 doesn't apply to cases where a contract was impossible from the beginning.

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    Void ab initio contract

    A legal agreement that is considered invalid from the very beginning, meaning it has no legal effect. It cannot be enforced by either party.

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    Necessaries under Section 69

    A legal principle that allows someone who provides essential goods or services to a minor or someone incapable of making a contract to recover the cost of those supplies.

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    Minor's Contract Rule

    A legal rule that states that minors (people under 18 in Malaysia) cannot enter into legally binding contracts.

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    Necessaries (in contract law)

    Goods or services that are considered essential for a person's survival or well-being based on their age, social status, and economic circumstances.

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    Contractual Capacity

    The ability to enter into a legal agreement that can be enforced by law.

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    Contract for Necessaries

    A type of contract that involves a minor or someone incapable of making a contract, and where the supplier can seek reimbursement for supplying essential goods or services.

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    Mohori Bibee v Dharmodas Ghose

    A rule in Malaysian law that states that a minor's contract is void from the beginning and cannot be enforced.

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    Leha bte Jusoh v Awang Johari bin Hashim

    A court case where the Federal Court of Malaysia ruled that a minor who had purchased land had to return the purchase price after vacating the property, despite the contract being void.

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    Study Notes

    Capacity to Contract

    • Capacity refers to a person's ability to enter into a legally binding contract.
    • The Contracts Act 1950 outlines the requirements for capacity.
    • Section 10 states that all agreements are contracts if made by competent parties.
    • A person is considered competent if:
      • They are of the age of majority.
      • They are of sound mind.
      • They are not disqualified by any law.

    Age of Majority

    • The Age of Majority Act 1971 defines the age of majority in Malaysia as 18 years.
    • Persons below 18 are considered minors.
    • Contracts entered into by minors are generally void ab initio (from the beginning).

    Exceptions to the General Rule

    • Marriage Contracts: The general rule regarding the age of majority does not apply to marriage contracts.
      • A person under 18 can enter a valid marriage contract in Malaysia. Special permission from the Chief Minister can be granted for a girl aged 16-18 to marry.
    • Scholarship Contracts: A scholarship agreement with a minor is not considered invalid.
    • Employment Contracts: The Children and Young Persons (Employment) Act 1966 governs employment contracts involving minors and young persons (15 to 18 years). Specific conditions apply to minors.

    Sound Mind

    • Section 12 of the Contracts Act 1950 defines soundness of mind.
    • A person is of sound mind if they understand the contract and can form a rational judgment about its effect on their interests.

    Remedies for Minor Contracts

    • Section 40 of the Specific Relief Act 1950: If a court voids a contract involving a minor, the court can order the minor to compensate the other party if fair.
    • Section 66 of the Contracts Act 1950: Any person who gains an advantage from a void contract is required to return the advantage. This does not apply to minors because their contracts are void ab initio.
    • Minors are exceptions to remedies for misrepresentation under Section 115 of the Evidence Act 1950.

    Necessaries

    • Section 69 of the Contracts Act 1950 allows people to claim reimbursement for supplying necessaries to a minor.
    • Necessaries are goods or services suitable for the minor's condition in life. The specific necessities may depend on factors such as economic background, social rank, health condition and so on.

    Misrepresentation of Age

    • Even if a minor misrepresents their age, they can still claim their minority to avoid the contract.
    • Minors are protected from the legal consequences of their misrepresentation.

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    Description

    This quiz explores the concepts related to the capacity to contract as outlined in the Contracts Act 1950 and the Age of Majority Act 1971 in Malaysia. It covers the requirements for legal capacity, exceptions to the general rule, and specific provisions regarding minors and marriage contracts. Test your understanding of these legal principles.

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