Capacity to Contract

Solve your problems or get new ideas with basic brainstorming

Get Started. It's Free
or sign up with your email address
Rocket clouds
Capacity to Contract by Mind Map: Capacity to Contract

1. Section 10 of Contract Act 1950

1.1. parties to the contract must have full capacity to enter into legally binding contract

1.2. must be competent/capable

1.3. if lack of capacity, contract is void

2. Section 11 of Contract Act 1950

2.1. Age of majority: not underaged

2.2. Natural & Legal: property registered

2.3. Sound mind: not mentally disordered

2.4. Not prohibited by law: bankcruptcy

3. Contract by minor

3.1. generally void

3.2. minor cannot be sued under void contract

4. Contract between minor & adult

4.1. consequences

4.1.1. adult cannot enforce the contract

4.1.2. adult cannot recover property transferred to minor

4.1.3. Case Law: Mohori Bibee v. Dharmodas Ghose

4.2. transfer property by a minor

4.2.1. minor who had transferred his property, may get the contract declared void

4.2.2. minor have the advantage of not returning monies received from adult

4.2.3. Case Law: Tan Hee Juan v. Teh Boon Kiat

4.3. purchase of property by minor

4.3.1. a minor who paid the money to an adult, can recover the money upon returning the property transferred to him.

4.3.2. Case Law: Leha Jusoh v. Awang Johari

5. Age of majority

5.1. Section 2 Age of Majority Act 1971

5.2. 18 years old

6. misrepresentation of age

6.1. when a minor has misrepresentated his age, thereby induced a person to contract with him

6.2. the person cannot sue the minor

6.3. minor can plea minority to avoid contract

6.4. Case Law: Natesan v. Thanaletchumi & Anor

7. Exceptions whereby a minor can enter into a valid contract

7.1. Contracts for Necessaries

7.1.1. Section 69 of Contract Act 1950

7.1.2. minor is liable on contract of necessaries

7.1.3. Eg: food, shelter, education, clothing, medical services except luxurious articles.

7.2. Contracts of Scholarship

7.2.1. a scholarship entered into by an infant is valid

7.2.2. Eg: loan, sponsorship for the purpose of learning

7.2.3. Case Law: Government of Malaysia v. Gucharan Singh

7.3. Insurance Contract

7.3.1. Insurance Act 1963: a 10 years old child may enter insurance contract

7.3.2. if below 16 years old: must have written consent from parents/guardian

7.3.3. valid because it is in a minor's best interest to insure himself/ his property.