CAPACITY

• capacity definition

  (section 10) refers to legal competence of a person to enter into a valid contract, understood as having the mental ability to understand and be bound by the terms of the agreement.
• capacity divided into 3

  i. age of majority

  ii. state of mind

  iii. not disqualified (bankrupt)
• age of majority

  • 18 years
  • person under 18 is minor
  • all contracts entered by minor are void (general rule)

  (case)

  tan hee juan v teh boon kiat

  This case involved a minor who transferred land to an adult. Even though the transfer was officially witnessed and registered, the court later ruled it void when the minor asked to cancel it. The court ordered the land to be returned to the minor. This case illustrates the principle that minors generally lack the legal capacity to enter into contracts.
• exceptions to the general rule (age)

  i. under the contracts act 1950 (necessaries/necessities)

  • Necessaries are things which are essential to the existence such as food, shelter, clothing, education, medical services, transport
  • (section 69) allows a person who has supplied necessaries to a minor to sue them from payment of the goods supplied
• case that can be relate with necessaries

  nash v inman

  A tailor sued for the price of clothes which included 11 fancy waistcoats supplied to a Cambridge student. The court held that the action must fail as there was no evidence to indicate that the clothes were suitable to the minor’s condition in life. Furthermore, the minor’s parent had provided him with adequate clothes.
• state of mind

  • A meetings of mind and free consent is the basis of a contract. (Section 11)

  (case)

  SIM KON SANG PETER

  • a contract by unsound person is also VOID.