Contracts Act 1950: Capacity to Contract
44 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which of the following defines a person who is competent to contract?

  • A person who has no prior contracts
  • A person who can speak multiple languages
  • A person who has a college degree
  • A person who is of the age of majority and of sound mind (correct)

What is the legal status of a contract entered into by a person who is not of the age of majority?

  • Enforceable with parental consent
  • Void ab initio (correct)
  • Automatically valid at age eighteen
  • Valid after a trial period

Which of the following is an exception to the general rule regarding contracts made by minors?

  • Scholarship contracts (correct)
  • Product warranties
  • Employment contracts
  • Loan agreements

When can a person who is usually of unsound mind make a contract?

<p>When they are of sound mind (B)</p> Signup and view all the answers

What is the age threshold for a marriage to be solemnized legally in Malaysia according to the Marriage and Divorce Act?

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

What implications arise if a minor intentionally lies about their age to enter into a contract?

<p>The minor can prove their true age to vary the enforcement of the contract. (C), The minor is bound by the lie and cannot claim their true age. (D)</p> Signup and view all the answers

In the context of misrepresentation of age by a minor, which statement is true?

<p>The minor retains the right to declare themselves a minor to void the contract. (B)</p> Signup and view all the answers

What does the case NATESAN V THAN LETCHUMI & ANOR establish regarding minors and contracts?

<p>Minors can declare their actual age to avoid obligations from misrepresented contracts. (C)</p> Signup and view all the answers

If a minor misrepresents their age and enters a contract, which of the following statements is correct?

<p>They can call into question the validity of the contract based on their actual age. (B)</p> Signup and view all the answers

What is the restriction placed on a minor regarding the denial of their true age after a misrepresentation?

<p>A minor can deny their misrepresented age if they prove their true age. (A), A minor cannot deny their age after entering the contract under any circumstances. (C)</p> Signup and view all the answers

What must a party do to terminate a contract of service without notice?

<p>Pay an indemnity equal to the wages that would have accrued during the notice period. (A)</p> Signup and view all the answers

Under what condition is a contract entered into by a minor considered void ab initio?

<p>If both parties are minors. (B)</p> Signup and view all the answers

What kind of remedy may a court require upon adjudging the cancellation of a contract?

<p>The party must make compensation as justice requires. (A)</p> Signup and view all the answers

In the case of a void agreement, what is required of a party who has received an advantage?

<p>They are bound to restore the advantage or make compensation. (D)</p> Signup and view all the answers

What does a fiduciary relationship require?

<p>A relationship built on trust and confidence. (D)</p> Signup and view all the answers

Which of the following contracts is NOT exempt from being void ab initio when entered into by a minor?

<p>Leisure contracts (B)</p> Signup and view all the answers

What is the main principle of Section 66 of the Contracts Act 1950?

<p>People receiving advantages under void agreements must return them. (D)</p> Signup and view all the answers

What may a court require from a minor if deemed necessary in relation to a contract?

<p>The minor can be required to make payment. (C)</p> Signup and view all the answers

What does the term 'void ab initio' imply in the context of contracts?

<p>The contract is never valid. (C)</p> Signup and view all the answers

According to the Privy Council in Mohori Bibee, what factor makes a contract void if one party is a minor?

<p>All parties must be competent to contract. (A)</p> Signup and view all the answers

What does section 69 of the Contracts Act 1950 provide for a person incapable of entering into a contract?

<p>They are entitled to a refund for necessities received. (B)</p> Signup and view all the answers

In the context of necessaries, which case illustrates the importance of considering individual circumstances?

<p>Gurcharan Singh (A)</p> Signup and view all the answers

Which of the following would likely be classified as 'necessaries' for a minor according to legal precedents?

<p>Food and educational materials. (D)</p> Signup and view all the answers

What was the outcome regarding the purchase price in the case of Leha Bte Jusoh?

<p>The appellant was ordered to refund the purchase price. (D)</p> Signup and view all the answers

Which statement accurately reflects the legal view on contracts made by minors?

<p>Minors can void contracts at any time. (C)</p> Signup and view all the answers

Which of the following expenditures was recognized as necessaries in Chapple v Cooper?

<p>Burial expenses. (B)</p> Signup and view all the answers

What should be taken into account when determining the 'necessaries' for a minor?

<p>The minor's condition in life (B)</p> Signup and view all the answers

How should the subject matter and extent of the contract vary for a minor?

<p>It should depend on the state and condition of the minor (D)</p> Signup and view all the answers

If an item is considered luxurious, how does it classify in terms of necessities?

<p>It cannot be classified as a necessity (B)</p> Signup and view all the answers

What is the distinction between 'necessities' and 'necessaries'?

<p>Necessities are a subset of necessaries but not limited to them (B)</p> Signup and view all the answers

What happens if a minor misrepresents their age before entering a contract?

<p>The minor may be bound by the contract if someone relied on the lie (D)</p> Signup and view all the answers

Under S.115 of the Evidence Act 1950, what is required for a party to deny the truth of their representation?

<p>They cannot deny the truth if another acted on their declaration (C)</p> Signup and view all the answers

What implications does a minor's condition in society have on their necessities?

<p>Necessities vary by the minor's social and economic status (D)</p> Signup and view all the answers

In legal terms, what is meant by 'act or omission' in S.115 of the Evidence Act?

<p>An intentional behavior causing belief in another (C)</p> Signup and view all the answers

What does the Contracts (Amendment) Act 1976 state about scholarship agreements entered into by minors?

<p>Such agreements can be validated if claimed under specific sections. (B)</p> Signup and view all the answers

According to the Children and Young Persons Employment Act 1966, what is the age range for a 'young person'?

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

Which of the following types of work can a child perform under the Children and Young Persons Employment Act?

<p>Light work suitable to their capacity. (A)</p> Signup and view all the answers

What stipulation is placed on female young persons regarding employment in hotels, bars, and restaurants?

<p>They can work if the establishment is managed by their parent/guardian. (D)</p> Signup and view all the answers

Which of the following correctly describes the ability of children to enter into contracts according to S.13 of the Employment Act 1955?

<p>Children and young persons can enter contracts of service but not as employers. (B)</p> Signup and view all the answers

What happens if a child breaches a contract of service in relation to recoverable damages, according to the Employment Act?

<p>No damages or indemnities can be recovered from the child. (C)</p> Signup and view all the answers

Which of the following is NOT a condition under which a child may be employed according to the employment provisions?

<p>Work in a private enterprise without restrictions. (C)</p> Signup and view all the answers

What does S.1A of the Children and Young Persons Employment Act 1966 define as a 'child'?

<p>A person who has not completed their 15th year of age. (B)</p> Signup and view all the answers

In which type of employment is a young person prohibited from engaging, unless specific conditions are met?

<p>Work in bars and restaurants. (D)</p> Signup and view all the answers

What is a requirement for a minor to be validated in an employment contract under current legislation?

<p>Approval by the Director-General is needed for certain jobs. (A)</p> Signup and view all the answers

Flashcards

Who is competent to contract?

A person is deemed competent to enter a contract if they are of the age of majority and of sound mind. This means they can understand the terms of the contract and make a rational judgment regarding its impact on their interests.

What happens to a contract made by a minor?

A contract entered into by a minor (under the age of 18) is void from the beginning, meaning it has no legal effect.

Are there any exceptions to the rule about minors and contracts?

Despite the general rule, contracts relating to marriage, scholarships, employment, and insurance are exceptions. These contracts can be valid even if made by a minor.

What are the legal requirements for marriage in Malaysia?

In Malaysia, regardless of age, a marriage is void if either party is under 18 years old at the time of the marriage ceremony. This applies to all marriages regardless of the type.

Signup and view all the flashcards

What happens if someone breaches a promise to marry?

A betrothal ceremony followed by the refusal to accept or reject an arranged marriage plan, can lead to a breach of promise to marry. The party who breaks the promise may be held liable for damages.

Signup and view all the flashcards

Termination without Notice

A party to a contract of service can end the contract without giving notice by paying the other party an amount equal to the wages they would have earned during the notice period.

Signup and view all the flashcards

Contracts by Minors

Contracts entered into by minors (people under the age of 18) are usually void, meaning they are not legally binding.

Signup and view all the flashcards

Remedies for Void Contracts

Even though a contract with a minor is void, the minor might still be able to claim remedies or compensation if they received benefits from the contract.

Signup and view all the flashcards

Specific Relief Act, Section 40

A court can order compensation to be paid in order to make things fair when cancelling an agreement due to a party being a minor.

Signup and view all the flashcards

Fiduciary Relationship

A fiduciary relationship, often involving trust and confidence, is required for a claim of breach of fiduciary duty.

Signup and view all the flashcards

Contracts Act 1950, Section 66

When a contract is found to be void, any party who gained an advantage from it must return that benefit or compensate the person who provided it.

Signup and view all the flashcards

Void ab initio

A contract entered into by a minor is considered void ab initio, meaning void from the beginning.

Signup and view all the flashcards

Indian Contracts Act, Section 65

The Indian Contracts Act, Section 65, is similar to the Malaysian Contracts Act, Section 66, in terms of how a void contract affects benefits received.

Signup and view all the flashcards

Scholarships and Minors

A scholarship agreement cannot be deemed invalid simply because the student is a minor.

Signup and view all the flashcards

Government of Malaysia v. Gurcharan Singh

The court ruled a scholarship agreement void because a minor entered it. This led to the amendment of the act.

Signup and view all the flashcards

Child (Employment Act)

A person under 15 years of age.

Signup and view all the flashcards

Young Person (Employment Act)

A person who is 15 or older but hasn't yet turned 18 years old.

Signup and view all the flashcards

Permitted Work for Children - Family Business

Light work suitable for their capabilities, done in a family business.

Signup and view all the flashcards

Permitted Work for Children - Public Entertainment

Work allowed in public entertainment, requiring a license.

Signup and view all the flashcards

Permitted Work for Children - Government Approved

Work approved by the government, done in schools, training institutions, or on vessels.

Signup and view all the flashcards

Permitted Work for Children - Apprenticeship

Apprentice work under a written contract, subject to approval from the Director General.

Signup and view all the flashcards

Young Person's Contract of Service

A young person can enter into a contract of service (meaning they can work) but cannot be legally an employer.

Signup and view all the flashcards

Breach of Service Contract for Children and Young Persons

Children and young persons cannot be sued for breaking a contract of service.

Signup and view all the flashcards

Competent party

A person who is considered legally capable of entering into a contract. They must be of legal age (18 in Malaysia) and have the mental capacity to understand the terms of the agreement.

Signup and view all the flashcards

Contract with a minor

A contract entered into by a minor (under the age of 18) is void from the beginning and cannot be enforced.

Signup and view all the flashcards

Necessaries Doctrine

A legal principle stating that a person who provides necessaries to an individual who cannot contract (e.g., a minor) is entitled to be reimbursed from the minor's property.

Signup and view all the flashcards

Necessaries (in contracts)

Items considered essential for a person's survival or well-being based on their age, social status, and circumstances.

Signup and view all the flashcards

Specific performance

A contract where the court orders a party to perform their agreed-upon obligations.

Signup and view all the flashcards

Rescinding a contract

The act of canceling or ending a contract, making it as if it never existed.

Signup and view all the flashcards

Guardian

A person who has legal authority to act on behalf of another person, like a minor, allowing them to enter into contracts and make decisions related to their property.

Signup and view all the flashcards

What are 'necessaries' for a minor?

A necessity is a good or service considered essential for a minor's well-being, taking into account their social standing and financial resources. It's not just basic needs, but things appropriate to their lifestyle.

Signup and view all the flashcards

How does social standing affect what's considered necessary?

If an item is deemed luxurious based on the minor's social standing, it won't be considered a necessity. So, a fancy car might be unnecessary for a middle-class minor.

Signup and view all the flashcards

What's the difference between "necessaries" and "necessaries?"

The law distinguishes between "necessaries" (legal obligations) and "necessaries" (everyday needs). A minor's legal obligation to pay for essential goods is broader than just basic necessities.

Signup and view all the flashcards

Can a minor who lied about their age be bound by the contract?

If a minor lies about their age to enter a contract, they may still be bound by it, as they are not allowed to deny their earlier lie in court.

Signup and view all the flashcards

What's the purpose of section 115 of the Evidence Act 1950?

This section of the Evidence Act prevents someone from contradicting their earlier statements that caused another person to act in a specific way.

Signup and view all the flashcards

Estoppel by Representation (minors)

A minor who lied about their age to enter a contract cannot later deny their age to avoid the contract. This is called estoppel by representation.

Signup and view all the flashcards

Minor's Ability to Prove True Age

Even though a minor lied about their age, they are still allowed to prove their true age to escape a contract.

Signup and view all the flashcards

Minor's Right to Avoid Contract

A minor who lied about their age and entered a contract can later claim they were a minor to avoid the contract.

Signup and view all the flashcards

Breach of Contract by Minor

A minor who lied to enter a contract cannot be sued by the other party for breaching the contract, as the contract was not legally binding.

Signup and view all the flashcards

Evidence Act 1950 (Section 115)

The Malaysian Evidence Act 1950 (Section 115) prevents a party from denying the truth of their representation.

Signup and view all the flashcards

Study Notes

Capacity to Contract

  • All agreements are contracts if made by competent parties.
  • Section 10 of the Contracts Act 1950 discusses this.
  • A person is competent to contract if they are of the age of majority and of sound mind.
  • Section 11 of the Contracts Act 1950 further defines competency.

Age of Majority

  • Subject to section 4, the minority of all males and females in Malaysia ends at 18 years old.
  • Individuals attaining this age are considered of the age of majority.

Sound Mind

  • Section 12 defines sound mind as the ability to understand the contract and form rational judgments about its impact on one's interests.
  • Someone generally considered to be of unsound mind can contract when of sound mind.
  • Someone generally considered to be of sound mind cannot contract when of unsound mind.

General Rule and Exceptions

  • If a contract is entered into by someone who is not of the age of majority, the contract is void ab initio.
  • Exceptions include:
    • Marriage contracts
    • Scholarship contracts
    • Employment contracts
    • Insurance contracts (possibly)

Marriage Contracts

  • Section 4 of the Age of Majority Act ensures that the capacity of any person to act in matters of marriage, divorce, dower, and adoption is not affected by the Act.
  • The case of Rajeswary and Anor v Balakrishnan & Ors [1958] 3 MC 178 highlights a betrothal ceremony followed by arranged marriage plans, where one party repudiated the promise and sought damages for breach.

Scholarship Contracts

  • Section 4(a) of the Contracts (Amendment) Act 1976 states that no scholarship agreement can be invalidated because the scholar is underage.
  • Government of Malaysia v Gurcharan Singh & Ors involved a valid scholarship claim despite the scholar being a minor at the time the contract was made.

Employment Contracts

  • The Children and Young Persons Employment Act 1966 differentiates between 'child' (under 15) and 'young person' (15-18).
  • Section 1A of the Act defines specific employment limitations for children and young persons.
  • Exemptions to the general rule of employment contracts exists for children and young persons (S.2).
  • Section 13 of the Employment Act 1955 allows termination of contracts without notice with the payment of indemnity equal to the wages during the notice period or remaining notice period.
  • Section 13 of the Employment Act 1955 states that no damages or indemnity could be recovered from a child or young person for a breach of contract of service.

Remedies

  • When a contract is made by a minor, and is void ab initio, remedies may still be sought in certain cases.
  • Section 40 of the Specific Relief Act gives courts discretion to direct minors to make payments.
  • The case of Tan Hee Juan v Teh Boon Keat [1934] MLJ 96 highlights the need for fiduciary relationships.

S.66 of the Contracts Act 1950

  • When an agreement or contract is deemed void, any person who received an advantage must return it or compensate for it to the other party.
  • Mohori Bibee v Dharmodasghse is in pari materia with s66, emphasizing the void ab initio status of contracts with minors.

S.69 of the Contracts Act 1950

  • If someone incapable of contracting receives necessaries, the provider can be reimbursed from the incapable person's property.
  • Necessaries must be suited to the person's life circumstances (not luxurious), as per Government of Malaysia v Gurcharan Singh. This case highlights that decisions of what constitutes necessaries are considered on specific circumstances.

Misrepresentation of Age

  • A minor who intentionally misrepresents age to enter a contract isn't automatically prevented from seeking redress under the law, though they aren't given any specific rights due to deception.
  • Section 115 of the Evidence Act 1950 explains when a party is prevented from denying a fact they have led another party to believe.
  • The cases Mahomed Syedol Ariffin v Yeoh Ooi Gark [1916] 2 AC 575 and Natesan v Than Letchumi & Anor [1953] MLJ 1 highlight how a minor can still assert a contractual claim in certain circumstances despite knowingly entering a contract as an adult).

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Capacity 1950 PDF

Description

Explore the key concepts of capacity to contract as outlined in the Contracts Act 1950, focusing on the age of majority and sound mind. Understand the implications of these criteria on agreements and the exceptions that apply. This quiz will deepen your knowledge of legal competencies in contract formation.

More Like This

Contract Law Capacity Quiz
1 questions

Contract Law Capacity Quiz

RefreshingHyena avatar
RefreshingHyena
Law of Contracts: Frustration of Tender Performance
12 questions

Law of Contracts: Frustration of Tender Performance

AstonishedLutetium avatar
AstonishedLutetium
Indian Contract Act: Consideration & Capacity
6 questions

Indian Contract Act: Consideration & Capacity

QuietAltoFlute avatar
QuietAltoFlute
Contracts Act 1950: Capacity to Contract
289 questions

Contracts Act 1950: Capacity to Contract

StainlessAshcanSchool avatar
StainlessAshcanSchool
Use Quizgecko on...
Browser
Open
Browser
Browser