Contract Law in Malaysia

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Question (a): Introduction Contract is an agreement that leads to legally binding and legally enforceable between both parties, as stated by (Latimer, pg275). It is crucial to understand the meaning of “contracts”, without an agreement which legally binds and enforced, there would be no business. In Malaysia, there is contract law in a statute, the Contracts Act, 1950.

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There are several elements of forming contract, which are offer, acceptance, the intentions to create legal relations, consideration, capacity and certainty. Capacity According to (Abbott, Pendleburry & Wardman, pg112), capacity refers to the power to enter into any contract they wish. In Section 11 of Contracts Act 1950, every person is competent to binding a contract, when that specific person is in the age of majority, of sound mind, and is not disqualified from contracting in law previously. But, for some particular group of individual, there is no capacity of entering into a contract for them, this particular group are minors, mentally ill or drunkenness and also corporations. Minors In Malaysia, a minor refers to anyone who below the age of 18, according to (Lee, pg106). According to Age of Majority Act, 1971 stated that the age of majority is 18 and above. According to the case of Tan He Juan v Teh Boon Keat [1934], the plaintiff, who was an infant, executed the transference of land under the approval of defendant. Then, court held to declare the transference, and contract was void because of the involvement of minors entered into a contract. Based on (Abbott, Pendleburry & Wardman, pg112), there are two principles in law to govern minor’s contract. First, it was formed to protect minors to against their immaturity and lacking of experiences. Second, it is used so that the law will not cause unnecessary hardship to people who deal an agreement with a minor. Therefore, contracts that minor entered into will eventually be void, according to Contracts Act. The law seems to be prejudiced on adults who deal with minors. Therefore, to refuse any unfairness, certain exceptions have been created to avoid minors obtaining benefits with the existence of this law.

  1. ‘Contracts’ for necessaries

As stated by (Nabi Baksh and Arjunan, pg173), under section 69 of the Contracts Act, if an individual is supplied by another individual with necessaries that suitable to one’s condition in life, supplies is able to reimbursed from such individual’s property. This section may provide a broader scope of facts. Therefore, according to (Elliott and Quinn, pg57), ‘necessaries’ means goods that is importantly for a minor and it is suitable to the condition in life. Such goods are including foods, shelters and clothes. Court will be deciding whether if a contract is necessaries; therefore, court will first determine whether that specific goods are considered crucial and suitable for minor’s condition in life,

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