Tutorial 4 – ITCLR, Certainty and Minors

2. Mr. Free-at-last was given a promotion whereby he was to be posted to Bangkok in

February 2012. His wife, Madam Frustrated, could not join him due to her
commitment to her new job. Mr. Free-at-last promised Madam Frustrated that he
would provide RM2,000 a month as her monthly allowance plus contribution to
their housing loan. However, Mr Free-at-last had completely forgotten about
Madam Frustrated when he met Miss Tomyam in Bangkok. Can Madam
Frustration enforce the promise made by Mr. Free-at-last?

The issue is whether the parties, Mr F and Mdm F, had the intention to create legal relations
when Mr F promised to provide RM2,000/- monthly allowance to Mdm F and to contribute to
their housing loan.

Law

In case of social, domestic or family agreements, the presumption is that parties have no
intention to create legal relations.

In Balfour v Balfour, a wife tried to sue her husband for monthly allowance which the
husband had agreed to pay her. It was held that the agreement was not legally enforceable.

Such presumption may be rebuttable. In Merritt v Merritt, a husband who had left the
matrimonial house had an agreement with his wife to pay her a sum from which she was to
pay the mortgage on the house. Once the mortgage was paid he was to transfer the property
into her name. This agreement was duly written and signed. Upon completion of payment the
husband refused to transfer the property. The court held that the couple was estranged and
was living apart when the agreement was made. There was intention to create legal relations
between the parties. Thus, there existed a valid contract.

Generally, it up to the courts to ascertain the intentions of the parties from the language and
context used.

Application and conclusion

The facts of this question are similar to Balfour, unlikely Mdm F can bring her case within
Merrit v Merritt. The court likely to hold this is a domestic agreement in which the parties
had no intention of the parties to create legal relations.

In conclusion, it is submitted that Mdm F is unlikely to be able to enforce Mr F’s promise.

Would your answer differ if Mr. Free-at-last and Madam Frustrated were going
through a separation when the promise was made? (10 marks)
The answer will be different in this situation.

In Merritt v Merritt - The couple was estranged and was living apart when the agreement was
made. Held: There was intention to create legal relations and there existed a valid contract.
Thus, applying Merritt v Merritt, the presumption will likely be rebutted and Mdm F would
most likely be able to enforce Mr F’s promise.
3. Carol owns a dance club. As she was unable to maintain and run the club, she
rented the club to Jojo at an annual rent of RM 100,000 for as long as Jojo likes’.
Carol now wants to challenge the validity of the rental agreement.
Advise Carol. (5 marks)

The issue in this question is to determine whether the rental agreement between Carol and
Jojo is void for lack of certainty.

One of the elements required to constitute a valid contract is there must be certainty of
subject matter.

According to Section 30 Contracts Act 1950, agreements that are not certain in meaning or
which the meaning is not capable of being made certain, are void. In other words, if it cannot
be ascertained what the parties are contracting for, there would be no valid contract.

In Karuppan Chetty v Suah Thian [1916], a lease contract for $35 per month ‘as long as he
likes’ was held to be void for uncertainty.

On the facts, Carol agrees to rent the club to Jojo for ‘as long as he likes’. This is similar to
Karuppan Chetty v Suah Thian. The phrase ‘as long as he likes’ carries an uncertain Comment [ER1]: Always underline /
highlight the case in the exam, to bring to
definition. The duration of the rental period is ambiguous. Therefore, the rental agreement is marker’s attention.
not capable of being accepted as a valid contract. Comment [ER2]: For this part you try
to provide reasons why there is uncertain
definition.
In conclusion, the contract between Carol and Jojo is void due to uncertainty.
Comment [ER3]: Do not write “...in
conclusion the contract will not be
enforceable between S and M”, because
you are suggesting that the agreement is
still “valid” except that it cannot be
enforced under the law.

A “void” contract means it is not valid

from the beginning.
Tutorial 5

1. Sly a 17 year old student, entered into a contract to buy some books from Wonderful
Book Store worth RM 450 on credit basis. The payment must be made in 3 equal
monthly installments of RM 150 each. He also bought a luxury motorcycle which
cost RM 20,000 from Hock Kiew Motors so that it would be easier for him to travel
to school. Sly promised to pay the price of the motorcycle within 30 days. Its more
than 2 months now, and Sly had not make any payment in respect of the goods
bought. He has also not paid the rent of his room for the last 6 months, amounting to
RM 900. His landlord, Mr. Lim requires your advice. Advise Wonderful Book Store,
Hock Kiew Motor and Mr. Lim on whether they would be able to recover their
respective debts from Sly.

• The issues in this question are as follow: Comment [ER4]: Start by stating the
issues, i.e. you are telling the Examiner
1. Whether Sly, a minor, was competent to contract at the material time of the three what the legal problems of the Q are.
contracts.
2. Whether the 3 contracts constitute ‘necessaries’ for him.

• All parties to a contract must be legally competent to enter into a contract i.e. they must Comment [ER5]: Next, you begin to
explain the law.
have the legal capacity to contract.

• Under S. 10(1) of the Contracts Act 1950 (CA 1950), all agreements are contracts if they Comment [ER6]: Put in any relevant
law (statutory provisions or cases) that
are made by the free consent of parties competent to contract, for a lawful consideration support your explanation of law.
and with a lawful object, and are not hereby expressly declared to be void.

• Section 11 provides for the categories of people who are competent to contract:-

the person is of the age of majority according to the law to which he is subject, and

the person is of sound mind, and

he/she is not disqualified from contracting by any law to which he is subject.

• A person below 18 years is known as a “minor”. The age of majority for contracts is 18
years according to S. 2, Age of Majority Act 1971.

• The general rule is that a minor is incompetent to contract. Thus, a contract entered into by
a minor is VOID, as decided in Mohori Bibee v. Dhurmodas Ghose and Tan Hee Juan v
Teh Boon Keat. Comment [ER7]: These two cases are
inserted to support your statement of law
that a contract entered into by a minor is
• There are exceptions to the general rule that a minor’s contract is void. One such contract is void.
a contract for necessaries under Section 69 Contracts Act 1950.

• A minor has a statutory liability under S. 69 Contracts Act if he enters into a contract for
necessaries supplied to him.

• “Necessaries” are things which are essential to the existence and reasonable comfort of a
minor. It includes items such as food, lodging, clothing, medicine, medical care, basic
education and vocational training. In Government of Malaysia v Gurcharan Singh,
education was held to be a necessary. Thus, a scholarship agreement was held to be a
contract for necessaries.
• Necessaries must be ‘suited to his condition in life’. This would depend on the minor’s
station in life, his actual needs. Also depends on the circumstances in which the supply of
necessary was made and the purpose which was served. Necessaries may vary considerably
from one individual minor to another. Illustration (a) and (b) to s. 69.

• The elements of S.69 to be proved by an adult supplier:

i. Necessaries must have been supplied to a minor. In Nash v. Inman, it was held that
while clothes could be necessaries, when the minor is already adequately stocked,
then the extra clothes would be treated as mere luxury.

ii. Necessaries are supplied for him, spouse or child.

iii. The supplier can only claim a reasonable sum. Gurcharan Singh.

iv. The minor is only obliged to pay if he has property to do so.

• If the suppliers are successful in proving S.69, they can claim reimbursement from the
minor, who must pay a reasonable sum for the goods or services supplied. If the above
requirements are not complied with, then there is no necessary supplied to the minor and he
will not be required to reimburse the supplier.

• On the facts, Sly was 17 years old at the time of the agreement. He was a minor at the Comment [ER8]: It is not enough to
just state the law and provide the relevant
material time of the contract and was therefore not legally competent to enter into the 3 sections/cases. Relate them back to the
contracts. question by “applying the law”.
Usually you use words like “on the facts”
or “applying the law” when you are doing
• As to whether he has entered into a contract for necessaries, the following may be discussed: so.

• The first contract is for books with Wonderful Book Store. If these were textbooks, he will
require as a student. Thus, the books would be considered necessaries. It is submitted that
the sum of RM450/- was a reasonable sum.

• As regards his rented room, this would appear to be a necessary since as a student, he needs
shelter or lodging and there is nothing indicated on the facts as to whether Sly has
alternative places to stay. Thus, if the supply of lodging is a necessary, Sly must pay the
amount claimed by Mr Lim if it is a reasonable sum. It is submitted that the rental amount Comment [ER9]: Use the phrase “It is
submitted” whenever you wish to say that
of RM900 is a reasonable sum. this is your opinion, or this is your
argument.
• Regarding the motorcycle, it may be treated as necessary if Sly has no alternative means of
transport and if it is just an ordinary motorcycle. However, since Sly has purchased a
luxury, expensive motorbike, this would not be considered a necessary. It has to be one
which is of a reasonable price.

• In conclusion, Sly is advised that he is bound to reimburse both Wondeful Book Store and Comment [ER10]: Provide a
conclusion to your discussion of the
Mr Lim since these are contracts for necessaries. problem. Usually you use words like “in
conclusion” or “therefore”.
 Would your answer differ if Sly had lied about his age?

Here, the issue is whether Sly can still raise his minority as a defence to avoid the 3 contracts.

If a minor induces an adult person to enter into a contract with him by falsely representing his
age, the minor is not estopped or precluded from pleading minority to avoid the contract.
Natesan v Thanaletchumi, Mahomed Syedol Ariffin v. Yeoh Ooi Gark.

This means that even though the minor has lied about his age, e.g. that he is of 18 years, he
can later on argue that the contract is not valid because he has no legal capacity.

In conclusion, even if Sly had lied about his age, the legal position affecting his contractual
liability would appear to remain unaltered. He would still be protected by the law.