Scribd Logo
Upload

Welcome to Scribd!

  • 5 views

    Lecture 4 Capacity and Certainty

    Uploaded by

    招俊伸

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Lecture 4 Capacity and Certainty

    Uploaded by

    招俊伸
    5 views23 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    5 views23 pages

    Lecture 4 Capacity and Certainty

    Uploaded by

    招俊伸

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 23

    LAW1014 Business Law

    Lecture 4 Capacity and Certainty


    Introduction

     To engage into a legally binding contract, it is imperative that the parties


    involved possess the necessary legal capacity and mental competence
    as prescribed by the applicable legislation.
     In theory, every individual possesses the necessary qualifications to
    enter a contract. The inquiry pertains to the individuals who possess the
    necessary competence to engage in contractual agreements.
    Section 11 Contracts Act 1950

     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.
     As per Section 11, individuals who have not attained the age of majority
    are deemed legally incapable of entering into contractual agreements.
    a) Contract by a Minor

     Except for Section 10, the Contracts Act does not provide a
    comprehensive explanation about the consequences of a contract
    entered into by a person who is a minor. According to Section 10, it is
    stipulated that "all agreements are considered contracts if they are
    entered into by parties who possess the legal capacity to contract."
     In summary, according to Section 11 of the Contracts Act 1950, it may
    be stated that any agreement entered by a minor does not qualify as a
    legally binding contract.
    a) Contract by a Minor

     The concept of capacity in relation to age

     In accordance with the Age of Majority Act of 1971, the age at which an
    individual attains legal adulthood, known as the age of majority, is set at
    18 years.
    a) Contract by a Minor

     According to Section 11, any agreements entered into by a minor are


    not considered legally binding contracts.
     For instance, a 13-year-old individual named Ahmad visits an
    establishment that specializes in electrical items and proceeds to get a
    television set from a vendor named Brahim through an installment
    payment arrangement. In the event that Ahmad is unable to fulfil his
    obligation of paying the payment, Brahim initiates legal proceedings
    against Ahmad on the grounds of breaching the contractual agreement.
    MOHORI BIBEE V DHARMODAS
    GHOSE
     In this particular case, the individual appealing the decision provided a
    loan to the party being responded to, who happens to be a child. This
    loan was secured by a house that was leased to the appellant. The
    youngster, with the assistance of his mother, submitted an application
    to the court seeking a ruling that the lease agreement was invalid due
    to the minor's lack of contractual ability.
     Based on Section 9 and Section 10 of the Indian Contract Act, which can
    be compared to Section 10 and Section 11 of The Malaysian Contract
    Act, it is established that a contract entered into by a minor is
    considered void. The contract entered into with the minor was deemed
    null and void, so rendering him incapable of initiating legal action or
    being subject to legal action in relation to any contractual agreement.
    a) Contract by a Minor

     The case of Tah Hee Juan v. Teh Boon Keat pertains to the transfer of
    land by a minor. According The case of Tah Hee Juan v. Teh Boon Keat
    pertains to the transfer of land by a minor.
     According to Hereford J., the contract is considered null and void. to
    Hereford J., the contract is considered null and void.
    Exceptions

     The Contract Act of 1971 provides a limited number of exceptions for


    this particular aspect.
     Section 69 of the legal code states that in the event that an individual
    who lacks the capacity to enter into a contract, or someone whom they
    are legally obligated to provide for, is provided with essential items
    appropriate for their circumstances by another individual, the provider
    of said items is entitled to reimbursement from the assets of the
    incapable person.
    Exceptions

     Contract By A Minor Underage Of Majority Act 1971

     An Act allowed under any law.

     Contract For Necessary


    NECESSARY FOR MINOR

     1. Contract Act 1971 did not define the service that necessary for minor’s
    life.
     2. Common Law give us the necessary thing for minor’s life;
     Cloth
     Medical Treatment
     House
     Food
     Education
     Professional Training
     Scholarship
     Insurance
    AGE OF MAJORITY ACT

     1. Marriage, Divorce, dowries and child adoption. Rajeshwary Anor v


    Balakrishnan Ors.
     2. Religion an religious practices and ceremonies of the races in
    Malaysia .
     3. Case Rajeswary v. Balakrishnan
     Court held that when defendant broke his promise of marriage with
    plaintiff, the defendant was according to their religious practice, in
    breach of his contract of marriage, even plaintiff was a minor.
    Rajeshwary Anor v Balakrishnan Ors.

     The parties to this action were Ceylonese Hindus. The second defendant,
    father of the first defendant, through a go between approached the
    second plaintiff father of the first plaintiff to arrange a marriage between
    his son and the second plaintiff daughter. A few days later, members of
    the two families met and drew up a written agreement (with provisions
    for a dowry of RM3,000 and RM5,000 for breach of the agreement
    known as the penalty clause) to affect the marriage. Next morning, the
    ceremony of Nichayartham (Engagement), the customary manner of
    rectifying a betrothal was performed and at which the second plaintiff
    presented the first defendant with a gold sovereign about two weeks
    later the second plaintiff also presented the first defendant with a shirt,
    a dhoti and a shawl, and the first defendant in return presented the first
    plaintiff with a sari and a piece of material for making a blouse to go
    with it.
    Rajeshwary Anor v Balakrishnan Ors.

     Subsequently, the first defendant repudiated his promise to marry the


    first plaintiff. In the present proceedings, the plaintiff claimed, inter alia,
    damages against the first defendant for breach of promise of marriage.
    The first defendant pleaded, inter alia the incapacity of the first plaintiff
    to enter into the contract to marry she being a minor then. Held: The
    court held that the contract to marry entered into by a minor was not
    void.
    AN ACT UNDER ANY LAW

     1. Election Act– 21 years old.

     2. The Employment Act 1955 – 14 years old

     3. Contract (Amendment) Act 1976 – Scholarship

     4. Insurance Act 1996 – 10 years old(with consent )


    SOUND MIND VS. UNSOUND MIND

     Mental Capacity

     A contract is formed pursuant to consensus of minds on a matter.

     What is the significance of soundness of mind?

     What is unsound mind?

     Unsoundness of mind which causes incapacity to contract covers usual


    unsoundness of mind and occasional unsoundness of mind.
    Section 12 Contracts Act 1950

     1. A person who sound of mind can make a contract if at the time when
    he makes it, he can understand it and of forming a rational judgment as
    to its effect upon his interest.

     2. A person who is usually of unsound mind, but occasionally of sound


    mind, may make a contract when he is of sound mind.

     3. A person who is usually of sound mind, but occasionally of unsound


    mind, may not make a contract when he is of unsound mind.
    SOUND MIND VS. UNSOUND MIND

     According to English Law, a contract made by a person of unsound mind


    is not void contract but voidable at the option of the party who is of
    unsound mind.
    SOUND MIND VS. UNSOUND MIND

     Asia Commercial Finance (M) Bhd. v Yap Bee Lee & Ors. [1991] 1 CLJ 271
     The court stated that a person of sound mind who intended to rescind a
    contract which he had entered into, on the grounds of unsoundness of
    mind must prove two things, that is he was of unsound mind and the
    fact of the unsoundness of his mind was known to the other party at the
    time of entering into the contract.
    CERTAINTY OF CONTRACT

     1. Any contract should be legal

     2. The terms of a contract must be certain and not vague.

     3. Any Agreements which is not certain or capable of being made


    certain, are void under sec. 30

     “ Agreement, the meaning of which is not certain, or capable of being


    made certain, are void.”
    CERTAINTY

     Every term of an agreement must be certain or capable of being


    ascertained. Where the terms of an agreement are not certain, the
    contract may be void.
     This is stated in S.30 CA 1950. For explanation, please refer to
    illustrations (a), (c), (d) and (f) to S.30.
    Karuppan Chetty v Suah Thian

     The court in this case held that the agreement of the parties in a
    contract for lease of land for $35 a month for „so long as the lessee
    pleases is a void contract for lack of certainty of terms.
    Karuppan Chetty v Suah Thian

    WRITTEN AGREEMENT Karuppan Chetty v. Suah Tian (1916) 1 F.M.S.L.R 300


    Fact of the case: The parties agreed upon the granting of a lease at RM 35
    per month for as long as he likes.
    Issue: Whether the use of ‘for as long as he likes’ had raised the ambiguity
    in its terms.
    Held: The court held that the requirement of certainty had not been
    satisfied as the duration of one of the most important term of the lease was
    undefined or uncertain. Therefore, the agreement is void. Reason of
    decision: The language used by the party is not specific and too vague. In a
    nutshell, all uncertain contracts are void by virtue to Section 30 of Contract
    Act 1950

    You might also like