Contract Law Elements

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The fourth element of a valid contract is capacity to contract. Contractual Capacity is the legal ability to enter into a contract. Minors have certain rights and obligations established by the courts when it comes to contracts. Once a person reaches the age of 18, they are considered a major in every state in the nation. In addition to minors, other persons are able to avoid contracts. Mentally impaired and intoxicated people or convicts lack the capacity to enter into a contract. In principle, every person is qualified to contract. According to Section 10, every agreement made by the free consent of the parties competent to contract for a lawful consideration and with a lawful object is a contract. According to Section 11 prescribes that…show more content…
A person who has not reached the age of majority is not competent to contract, according to Section 11. One of the elements constituting a valid contract is that the parties entering the contract are those who have the competency to contract. This is based on Section 10 (1) of the Contract Act 1950. Competency refers to the capacity of being an adult, having a sound mind and not forbidden by law to enter any contract example bankruptcy. This principle is based on Section 11 of the Contract Act 1950 which provides that “every person is competency to contract that 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 law to which he is subject”. In Malaysia, the age of majority is recognized as above eighteen years of age as stated in the Age of Majority Act 3 1971: “The majority of all males and females at the age of eighteen years and every such male attaining that age shall be of the age of…show more content…
The meeting of two or more parties leads to the formation of an agreement. If this agreement satisfies particular conditions, a legally enforceable contract is formed. On that basis, every contract must be voluntarily done without any negative element affecting a person’s capacity to make independent decisions. According to Section 10, states that every agreement is a contract if it is made by the free consent of the parties. And in Section 14, consent is said to be free if it is not caused by coercion, undue influence, fraud, misrepresentation or mistake. Whilst little difficulty arises in these matters, so far as adults are concerned, an increasing number of such transactions are being entered into, by children. And it has often been said that contracts involving a child may not be valid. There are a few cases for us to refer. First, there is Mohori Bibee v Dharmodas Ghose case in 1903. It was held that the agreement made by an underage is void. The court in this case held that according to Section 9 and Section 10 of the Indian Contract Act, which is in pari material to Section 10 and Section 11 of the Contracts Act, a contract made by an underage is void. The appellant in this case loan a sum of money to the respondent, a minor, secured on a house which was leased to the appellant. The minor, applied for a court declaration that the lease was void through the mother, because the underage had no capacity to contract. The court held that
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