MINORS

At common law persons under the age of 21 were designated "infants" and had only a
limited capacity to contract. From January 1, 1970, the Family Law Reform Act 1969
reduced the age of majority to 18 and authorised the term "minor" as an alternative to
"infant." "Minor" is now the preferred term. The capacity of a minor to contract is still
regulated by the common law, modified by the Minors' Contracts Act 1987 which
repealed a troublesome statute, the Infants Relief Act 1874.

The general principle is that a contract made by a minor with an adult is binding on the
adult but not on the minor. If, after attaining his majority, he ratifies it by an act
confirming the promise he made when a minor, he is bound. There need be no
consideration for the act of ratification. A contract by a minor is not void and any money
or property transferred by him under the contract can be recovered only if there has been
a total failure of consideration. There are three exceptional cases where a minor is to
some extent bound.

Necessaries. A minor is bound to pay for necessaries supplied to him under a contract.
The Sale of Goods Act 1979 s.3, re-enacting the Act of 1893, provides:

"… where necessaries are sold and delivered to an infant (or minor) … he must pay a
reasonable price therefore.
'Necessaries' in this section means goods suitable to the condition of life of such infant
(or minor) … and to his actual requirements at the time of sale and delivery."

"Necessaries" are those things without which a person cannot reasonably exist and
include food, clothing, lodging, education or training in a trade and essential services.
The "condition of life" of the minor means his social status and his wealth. What is
regarded as necessary for the minor residing in a stately home may be unnecessary for the
resident of a council flat. Whatever the minor's status, the goods must be suitable to his
actual requirements-if he already has enough fancy waistcoats, more cannot be necessary:
Nash v. Inman [1908] 2 KB 1, CA.

The nature of the minor's liability for necessary goods is uncertain. The fact that the Sale
of Goods Act makes him liable only for goods "sold and delivered" and to pay, not any
agreed price, but a reasonable price, suggests quasi-contractual liability-he must pay, not
because he has contracted to do so, but because the law requires him to recompense the
seller for a benefit conferred and accepted. Some dicta support this view but others treat
the minor's liability as contractual. In Roberts v Gray [1913] KB 520, CA, a minor was
held liable for his failure to perform a contract for a tour with the plaintiff, a noted
billiards player. It was a contract for the instruction of the minor. The contract was
wholly executory and but it was held that the contract was binding on him from its
formation. It may be thought that there is a distinction between necessary goods and
necessary services but this is difficult to justify logically or historically. Perhaps the
contract in Roberts v. Gray belongs more properly to the category of beneficial contracts
of service, below.

A contract is not binding on a minor merely because it is proved to be for the minor's
benefit; but a contract which would otherwise be binding as a contract for necessaries is
not so if it contains harsh and onerous terms: Fawcett v. Smethurst (1914) 84 LJKB 473,
(Atkin J).

Beneficial contracts of service. It is for the minor's benefit that he should be able to
obtain employment which wou1d be difficult if he could not make a binding contract.
The law allows him to do so, provided that the contract, taken as a whole, is manifestly
for his benefit. So where a young railway porter agreed to join an insurance scheme and
to forgo any claims he might have under the Employers' Liability Act, he had forfeited
his rights under the Act, the contract as a whole being for his benefit: Clements v London
& North Western Railway [1894] 2 QB 482, CA. Contracts enabling a minor to pursue a
career as a professional boxer and as an author have been held binding as being for their
benefit.

Acquisition of property with obligations. When a minor acquires "a subject of a

permanent nature … with certain obligations attached to it"-such as a leasehold, or shares
in a company-he is bound by the obligations as long as he retains the subject. He must
pay the rent or calls on the shares: London & North Western Railway v M'Michael
(1850) 5 Ex 114. The contract is voidable by the minor-he may repudiate it any time
during his minority or within a reasonable time thereafter. It is uncertain whether
avoidance here means rescission ab initio or avoidance of only future obligations; but,
whether it is retrospective or not, it seems that the minor cannot recover money which he
has already paid unless there has been a total failure of consideration: Steinberg v. Scala
Ltd [1923] 2 Ch 452, CA.

Restitution by a minor. Where a minor has obtained property under a contract which is
not enforceable against him, the adult party who can neither sue for the price nor get the
property back may suffer an injustice. Even where the minor has lied about his age, no
action in deceit will lie because this would, in effect, enable the contract to be enforced
against him; and for the same reason it is improbable that the minor would be estopped
from asserting his true age. The Minors' Contracts Act 1987, s3, now affords a limited
measure of redress. Where a contract made after the commencement of the Act is
unenforceable against a defendant because he was a minor when it was made:

"… the court may, if it is just and equitable to do so, require the defendant to transfer to
the plaintiff any property acquired by the defendant under the contract or any property
representing it."

This may assist the plaintiff where the property is identifiable but where the plaintiff has
loaned the money it will usually not be. The plaintiff will then be able to recover in
equity only if he is able to prove that he loaned the money for the express purpose of
enabling the minor to buy necessaries and that he in fact did so: Lewis v Alleyne (1888) 4
TLR 560.

The 1987 Act, s3, provides "Nothing in this section shall be taken to prejudice any other
remedy available to the plaintiff." The plaintiff might rely on the equitable doctrine
which required a fraudulent minor to return property which he had obtained by deception
and which was still identifiable in his possession: R. Leslie Ltd v. Shiell [1914] 3 KB
607, CA; but it is not clear that there would be any advantage in doing so, since the
remedy under section 3 appears to overlap the equitable remedy and does not require
proof of fraud.

Guarantee of a minor's contract. Section 2 of the 1987 Act provides that a guarantee of a
minor's contract is not unenforceable against the guarantor merely because the contract
made by the minor is unenforceable against him on the ground that he is a minor. The
section does not apply if the contract made by the minor is unenforceable against him for
some other reason, for example misrepresentation or duress by the adult party. In such a
case the guarantor would not be bound.

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Who is a Minor or Infant?

Traditionally, a minor or an infant is anyone under the age of 21. This has been changed
by statutes in almost every state, and a minor is now anyone under the age of 18. The
term infant and minor are used interchangeably in most situations.

What is the Rule When Contracting With an Infant?

Generally seeking, anyone who contracts with an infant or minor is doing so at their own
peril. That means that the
law gives to infants the ability to void, or exit the contract as they see fit. The most
common justification for the rule is to protect minors from assuming obligations which
they are not capable of understanding. It is obvious to see that this will lead to harsh
results, so some general exceptions have been created.

What Exceptions Exist to Create a Binding Contract With a

Minor?

If every contract with a minor was invalid, no one in their right mind would ever enter
into a contract with a minor. To allow some minors to enter into contracts and/or prevent
minors from abusing their position, there are several exceptions including:

Sports or Entertainment Contracts

Generally speaking, minors who enter into sports or entertainment contracts are held to
them, and cannot void them at will.

Necessaries

Contracts for certain goods and services that are necessary to the health and safety of
infants cannot be voided. Such goods and services include food, clothing, and lodging or
shelter. In some instances, an automobile or motorcycle is also considered a necessary.

Disaffirm the Whole Contract

A minor who decides to void a contract because of his age must void the entire contract.
The law does not let them to continue to enforce some of the contract while voiding other
parts.

Ratification

A minor can only void a contract while they are still under the age of maturity (again,
usually 18), or for a reasonable time after they have reached that age. If a person does
nothing to disaffirm the contract after they stop being a minor, the law can find that they
will no longer be able to void the contract

Can an Attorney Help Me With Minor Contracts?

If contracting with a minor, the contract may not be legally enforceable. If you are in the
process of drafting a contract, or have already done so and the other party is seeking to
defend against its enforcement because they are a minor, contacting an attorney is
strongly recommended.

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CONTRACT BY MINOR

Traditionally, anyone under 21 was regarded by the law as a minor. The law
usually called such people as ‘infants’. Their ability to make a contract was first limited
by the common law, and then by the Infants Relief Act 1874, which introduced rather
complicated provisions on the subject. In 1969, the Family Law Reform Act reduced the
age of majority to 18 and replaced the term ‘infant’ with ‘minor’ and then in 1987, the
Minors’ Contract Act repealed the Infants Act 1874, and restored the common law,
which still governs contracts made by minor today.
 The basic common law rule is that contracts do not bind minors. There are,
however, some types of contract which are binding on minors, on which are merely
voidable.

In Contracts Act 1950:

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.

However in Section 11 of Contract Act 1950, it does not expressly stipulate the
effect of contract entered by incompetent party.

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 laws to which he is subject.

Section 2 of the Age of Majority Act 1971 provides that all persons in Malaysia attain
the age of majority at 18. Previously the repealed Age of Majority Act 1961 provided
that Muslims attain the age of majority at 18 while non-Muslims attain it at 21.

MOHORI BIBEE v DHARMODAS GHOSE[1]

The plaintiff, Dharmodas Ghose, while he was a minor, mortgaged his property
in favour of the defendant, Brahmo Dutt, who was a moneylender to secure a loan of Rs.
20,000. The actual amount of loan given was less than Rs. 20,000. At the time of the
transaction the attorney, who acted on behalf of the money lender, had the knowledge
that the plaintiff is a minor. The plaintiff brought an action against the defendant stating
that he was a minor when the mortgage was executed by him and, therefore, mortgage
was void and inoperative and the same should be cancelled. By the time of Appeal to the
Privy Council the defendant, Brahmo Dutt died and the Appeal was prosecuted by his
executors. The defendant, amongst other points, contended that the plaintiff had
fraudulently misrepresented his age and therefore no relief should be given to him, and
that, if mortgage is cancelled as requested by the plaintiff, the plaintiff should be asked to
repay the sum of Rs.10,500 advanced to him. The decision of the Privy Council on the
various points raised by the defendant was as follows. The Privy Council found that the
fact that the plaintiff was a minor at the time making of the agreement was known to the
defendant’s agent.

Their Lordships observed that Section 64 was applicable to the case of a

voidable contract. Minor’s agreement being void, Section 64 was not applicable
to the case and therefore the minor could not ask to pay the amount under this
section.

MINORS’ CAPACITY TO CONTRACT UNDER ENGLISH LAW

For the purpose of the law of contract, the age of capacity was reduced from 21
to18 by Section 1 of the Family Law Reform Act 1969. Section 9 of the same Act also
abolished the common law rule under which a person attained his majority on the day
preceding the relevant anniversary of the birth. According to this section, a person is
deemed to attain the age of 18 at the commencement of the eighteenth anniversary of his
birthday[2]. Based on Law of England, the legislation on minors in entering a contract is
laid down by 2 principles. First, the minor must be protected by the law against his
inexperience, as an adult may take an unfair advantage of the minor, or the adult may
cause the minor to enter into a contract, which maybe fair in itself, but not provident.
Second, the law should not cause unnecessary hardship to adults who deal fairly with the
minor.

A contract entered by a minor is voidable, in the sense that it can be either valid or
void.

For a void contract, referring to the case of Nash v Inman[3], in this case, a tailor
sued a minor to whom he had supplied clothes, including 11 fancy waistcoats. It was
decided that, as the minor was an undergraduate at Cambridge University at the time, the
clothes were suitable according to the minor's station in life. Unfortunately for the tailor,
however, it was further decided that they were not necessary, as he already had sufficient
clothing. Minors are only under a legal obligation to pay for things necessary for their
maintenance although even then they will only be required to pay a reasonable price for
any necessaries purchased - so no contact was enforceable.

MINORS’ CAPACITY TO CONTRACT IN MALAYSIA

The governing law for the age of majority is the Age of Majority Act 1971 (Act
21), which repealed the Age of Majority Act 1961. At present, the age of majority is 18
years. Generally in Malaysia, the contract entered by a minor is considered as void. For
example in the case of Tan Hee Juan v Teh Boon Kiat[4] and Leha bte Jusoh v Awang
Johari bin Hashim[5].

In the case of Tan Hee Juan, the plaintiff is a minor. Following the decision in
Mohori Bibee, it is said that contract that involved a minor is void. So there is no
contract at all. It was held that the plaintiff succeeds in his claimed and therefore Tan
Hee Juan should not have to pay back to the defendant as there is no fiduciary
relationship between the plaintiff and the defendant.

In the case of Leha bte Jusoh, The respondent 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. At the time of the alleged agreement the respondent was
a minor. 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. The court enables the minor to recover the money
paid upon returning the property transferred to him.

The courts in Malaysia followed the principle laid in Mohori Bibee; where all
contracts entered by minor are void, but in terms of remedy, following the decision of
Tan Hee Juan, there must be a fiduciary relationship between the parties, but in the case
of Leha Jusoh which followed the jurisdiction of both Mohori Bibee and Tan Hee
Juan, it doesn’t matter if there is a fiduciary relationship between the parties or not, as at
the end, the minor will be entitled for the property taken from and took by him.
CONTRACTS BINDING ON A MINOR

The general rule deduced from the case of Mohori Bibee v Dharmodas Ghose is
that ‘all agreements entered by minor is void’. However, there are exceptional contracts
available for the minor to be entitled as a valid contractor. The only contracts which are
binding on a minor are contracts for the supply of necessaries.

CONTRACTS FOR NECESSARY GOODS AND SERVICES

Necessaries mean ‘goods suitable to the condition in life of the minor or other
person concerned and to his actual requirements at the time of sale and delivery’[6]. It
therefore include more than just such essentials as food, shelter and clothing, and in
deciding the issue the courts can take into account the social status of the particular minor
that is items which might not be considered necessaries for a working-class child may
nevertheless be necessaries for one from a wealthy background. When deciding if a
contract is one for necessaries, the courts first of all determine whether the goods or
services are capable of amounting to necessaries in law, and then consider whether they
are in fact necessaries as far as the minor before them is concerned.

Under common law, a similar approach is taken to contracts for services as for
goods. In Chapple v. Cooper[7] an undertaker sued a widow, who was a minor, for the
cost of her husband’s funeral. It was held that this was a necessary service, and so the
young woman was obliged to pay. The Sale of Goods Act also provides that if
necessaries are sold to a minor, but before receiving the goods the minor decides that they
are no longer wanted, there is no obligation to accept and pay for them. Nor is a minor
bound by a contract which contains oppressive terms. In Fawcett v Smetthurst[8], a
minor was held not to be bound by a contracts for the hire of a car, even though it was a
necessary service in this case, because the contract included a term making him liable for
damage to the car ‘in any event’ that is whether or not the damage was his fault. Where
there is a binding contract for necessaries, the minor is only bound to pay a reasonable
price for them, which need not to be the contract price.

CONTRACTS OF SERVICE FOR THE MINOR’S BENEFIT

 Minors are also bound by contracts of service, providing these are on the whole
beneficial to them. In practice this generally means contracts of employment under which
a minor gains some training, experience or instruction for an occupation. In Clements v
London and North Western Railway[9], a minor made an agreement under which he
gave up his statutory right to personal injury benefit, but gained rights under an insurance
scheme to which his employers would contribute. It was held that the rights gained were
more beneficial than those given up, and so the contract was, on balance, for the minor’s
benefit and therefore binding.

MARRIAGE CONTRACTS

Section 4(a) of the Age of Majority Act 197:

Nothing in the Act shall affect the capacity of any person to act in the following
matters, namely marriage, divorce, dower, and adoption. Therefore a minor may
sue or be sued for a breach of promise to marry[10].

The courts have recognized an exception to the general rule that all contracts entered into
by a minor are void. In the case of Rajeswary v Balakrishnan[11], the court held that
contracts to marry entered into by minors are distinguishable from other classes of
contracts. Accordingly the minor plaintiff in that case could maintain an action on the
agreement entered into between her father as her guardian and on her behalf and the first
defendant whereby the latter promised to marry the minor.

In Malaysia, the situation is different where there are various Islamic law enactments in
each state in Malaysia. They provide a remedy for any breach of promise to marry.

MISREPRESENTATION OF AGE BY A MINOR

When a minor has misrepresented his age and thereby

persuaded/induced/encouraged a person to contract with him, the person cannot sue the
minor on the contract. Also, the minor can plea minority to avoid the contract.
This principle had been adapted to a number of Malaysian cases. In Mahomed Syedol
Ariffin v Yeah Ooi Gark[12], the respondent moneylender sued the appellant for a sum
of $29,521 lent. The appellant’s defence was that at the time of the loan, he was still an
infant. He had wrongly believed and misrepresented to the respondent that he was 21
years old. Applying the common law of England to Penang, relying on R Leslie Ltd v
Sheill[13], the Privy Council held that the misrepresentation was not fraudulent and even
it was, there could not be any action against the appellant as he was still minor.

Another Malaysian case that applied this principle is R Natesan v K

Thanaletchumi[14]. The question arose is whether a minor was stopped from pleading
minority. In this case, the plaintiff sued the two defendants on an agreement dated 28
March 1950, entered into by the three parties. The first defendant pleaded infancy in her
defence. The plaintiff argued that the defendant is stopped from pleading so as she had
represented herself as being of full age. Wilson J found as a fact that there was no such
representation. The court further held that even if an infant had falsely misrepresented
herself to be a major and thereby induced a person to enter into a contract, she is not
stopped from pleading her infancy to avoid the contract. The court had followed the
Indian decision of Khan Gul v Lakha Singh AIR[15] in doing this judgment.

RECOVERY OF PROPERTY TRANSFERRED

Section 65 of the Contract Act 1950 requires a party rescinding a voidable contract who
has received any benefit there under to restore the benefit. Section 66 of the act requires
any person who has received any advantage under an agreement that is discovered to be
void or to restore or to make compensation for it to the person from whom he received it.
Both section require that a party who has received any benefit or advantage from a
voidable contract or void agreement should restore the benefit or to make compensation
for it.

However, the decision from court in Mohori Bibee v Dharmodas Ghose was contravene
to Section 65 and 66 of the Contract Act 1950 where an adult cannot enforce or recover
the contract with the minor. In this case, the Privy Council held that the contract of loan
was void and not voidable. The Privy Council further elucidated that whether a contract
is void or voidable presupposes the existence of a contract within the meaning of the act.
Section 66, like Section 65, starts from the basis of there being an agreement or contract
between competent parties and has no application in the case of an infant in which there
never was, and never could have been any contract.

In Tan Hee Juan v Teh Boon Keat, Hereford J expressed that on adjudging the
cancellation of an instrument under Section 41 of the Specific Relief Act 1950, the court
must exercise its discretion to require the minor to refund the purchase money but the
applicant must establish that there is some fiduciary relationship.

The former Federal Court applies the elements in Mohori Bibee v Dharmodas Ghose
and in the case of Tan Hee Juan v Teh Boon Keat that Section 66 in Contract Act
1950 does not apply in a minor contract and there must be a fiduciary relationship. The
decision in Leha Bt Jusoh v Awang Johari bin Hashim enables the minor to recover
the money paid upon returning the property transferred to him.

In England, when a minor pay money in pursuance of a contract that is not binding to
him, he cannot recover the money so paid if he has received any benefit under the
contract. In Valentini v Canali[16], a minor took a lease of a house and agreed to pay the
landlord £102 for the furniture. He paid £68 and gave a promissory note for the balance.
After some months use of the house and the furniture, he took proceedings to get the
lease set aside and to recover the money already paid. The court decides that the money
only can be recovered where there has been a total failure of consideration.

CONCLUSION

Based on the general rule in Mohori Bibee v Dharmodas Ghose, it is clear that a
contract entered by a minor is void. If we compare the principle of contract between
Malaysia and English law, the decision and judgment may be different. Malaysia law
diverse from English law where the contract entered by a minor is whether void or
voidable. As a result, there exist a difference remedies and age of majority in Malaysia
and English.
Minors are permitted to enter into contracts for limited purposes, and the test is one that
focuses on the nature of the transaction, and whether the minor is of an age such that they
capable of understanding it.

The general law states that contracts entered into by children that are for 'necessaries' are
binding on children, as are those for apprenticeship, employment, education and service
where they are rightly said to be for the benefit of the child. Contracts for necessaries are
for the supply of food, medicines, accommodation, clothing, amongst other things but
generally exclude conveniences, and products and services for comfort or pleasure.
Commercial or 'trading' contracts are excluded. These latter contracts are voidable at the
option of the minor, and whether the minor may avoid the contract depends on the nature
of the contract.

The remedies are unenforceable for the minor if the contract entered by him is beneficial
upon him.