Professional Documents
Culture Documents
2. Family/Domestic/Social Agreements.
1. Business/Commercial Agreements
Presumption:
- There Is an intention to create legal relation unless specify otherwise.
The contract is binding on the parties.
- However, if any party wishes that the agreement was not binding, the party must
rebut the presumption by evidence.
- For example, using a clause “subject to contract’ in the agreement. The effect of
this clause is that, the oral or informal agreement is not binding until the execution
of a full or final agreement.
Cases:
(With intention)
Carlill v Carbolic Smoke Ball
- The act of defendant in depositing 1000 pounds in a bank showed that the
defendant had intention to make the advertisement as an offer. Therefore, Mrs
Carlill could claim for 100 pounds.
2. Family/Domestic/Social Agreements
Presumption:
- There is No intention to create legal relation unless proven otherwise.
The contract is not binding on the parties.
-However, the presumption may be rebutted by giving evidence.
Cases:
(No intention)
Balfour v Balfour (good relation)
- The defendant husband was a civil servant stationed in Ceylon. When he was in
England he had promised to pay his wife monthly allowance as maintenance. The
wife was unable to follow him due to health problem. The husband did not fulfill
his promise. The wife sued him for breach of promise. Held: Her claim failed
because there was no intention to create legal relation.
(With intention)
However, in Merrit v Merrit (bad relation)
- The defendant left the matrimonial home. The house was under joint names of
husband and wife and subjected to mortgage. Husband and wife had a discussion
and the husband agreed to pay the wife 40 pounds a month for the purpose of
paying the mortgage payments. However, when the payment is completed the
husband refused to transfer the house. The agreement was made in writing on a
paper and the husband signed it. Held: There was intention to create legal relation
between parties since the agreement was made in writing. The court ordered the
house to be transferred to the wife.
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CAPACITY
Sound mind
General rule:
- Contracts entered into by minors are void.
Exceptions. Contracts entered into by a minor are valid in the following situations:
Necessaries/Necessities
Education/Scholarship
Insurance
Contracts of Apprenticeship
Sec 4(a) of Age of Majority Act 1971 “Nothing in this Act shall affect the
capacity of any person to act in the following matters, namely marriage,
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divorce, dower and adoption…”- Promise of marriage entered into by
minors or by their parents on their behalf are valid and binding upon the
minors. The minors may sue or be sued for breach of promise of marriage
contracts.
1. Necessaries/Necessities
Test of necessaries:
nature of the goods/services supplied
bound to support
supplier of necessaries may only claim reasonable price
Nash v Inman
- The defendant a minor ordered 11 fancy waistcoats from the plaintiff (a tailor).
The plaintiff claimed for the price of the clothes. The defendant’s father gave
evidence that the minor had enough clothes suitable and necessaries in life. Held:
11 fancy waistcoats were not necessaries. They were luxuries and therefore, the
minor was not bound by the contract.
2. Education/Scholarship
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- Scholarship agreements = scholarship, bursary, loan, sponsorship, or appointment
to a course of study, the provision of leave with or without pay, or any other
facility for the purpose of education and learning.
3. Insurance
- Section 153(1) of the Insurance Act 1996 : a minor who is more than ten years
old but less than sixteen years old may enter into an insurance contract if he
obtains a parent or guardian’s consent. Section 153(2) of the Insurance Act 1996
states that if a minor is sixteen or older, they may enter into an insurance contract.
B. Sound Mind
E.g.
- persons of mentally disorder, and person incapacitated through sickness, alcohol
or drugs
Effect:
Contract is voidable at the option of the person of unsound mind if
The fact of mental disorder or intoxication can be proved
CERTAINTY
Section 30 Contracts Act 1950:
- Uncertain agreements are void