CONTRACT BY MINORS

DR. SONNY ZULHUDA

INTERNATIONAL ISLAMIC UNIVERSITY

MALAYSIA
OUTLINE
Contract by Minors
Exceptional Circumstances

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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)

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Contracts by minors
Who 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

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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.
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The effect of contracts by Minors
The 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)

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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.

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Leha bte Jusoh v Awang Johari bin Hashim (1978)
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.”

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Leha bte Jusoh v Awang Johari bin Hashim (1978)
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.

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Exceptional Circumstances
Contract for necessaries
Contract of services
Contract of scholarship
Contract of marriage*

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Contract for necessaries
Claim 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

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Govt. of Malaysia v Gurcharan Singh (1971)

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.”

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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?

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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.

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The Current Position for Scholarship
contracts: Contracts (Amendment) Act 1976
Section 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

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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.
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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.
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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:
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Marriage of a Minor
Before 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.

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Recovery of property transferred
to a Minor
Section 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.

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Recovery of property transferred
to a Minor
Section 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.

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Recovery of property transferred
to a Minor
Mohori 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
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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:
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Misrepresentation of Age by
Minor
Mohamed 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.

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THE END