Pak Ali wants to give his land to his son, Rahman, for his 21st birthday.

As Rahman will
not be paying any money to his father, but his father is worried that since there is no
consideration for the transfer of his land to Rahman, the transfer may be void by virtue
of Contracts Act 1950. Advise Pak Ali based on the ONE (1) provision of the Contracts
Act 1950 and ONE (1) decided case if there any

The issue here is whether, valid contract form between Pak Ali and his son since, the property
is not to be transferred by payment of certain amount of money as consideration?

According to the Contracts Act 1950, in order to form a valid contract, the element of
‘consideration’ must be present. Consideration often includes the form of monetary, or both
parties must have the obligation to give the other party something which is beneficial.Section
26(a) of the Contracts Act 1950 renders a contract made without consideration to be valid if it
is expressed in writing and registered, and is made on account of natural love and affection
between parties standing in a near relation to each other. The meaning of ‘natural love and
affection’ is not defined in the Contracts Act 1950, so reference can be made to case laws that
provide interpretations to the provision.Reference is made to Section 26(a) of the Contracts
Act 1950 which stipulates that:“An agreement made without consideration is void, unless –it
is in writing and registered, it is expressed in writing and registered under the law (if any) for
the time being in force for the registration of such documents, and is made on account of
natural love and affection between parties standing in a near relation to each other;”

In the case Re Tan Soh Sim [1951] MLJ 21, Tan Soh Sim, the deceased, had three sisters.
Their mother had four kids when she first get married a man named Tan Ah Thai. Tan Ah
Thai had seven children with Khoo Kim Huat when she passed away. The kids from Tan and
Khoo stayed friends and socialised with one another. Tan Soh Sim married, but without any
hesitation, adopted four kids. One Chan, her husband, got married Tan Boey Kee, his second
wife.A solicitor drafted a document for all Khoo and Tan children to sign in order to
renounce all claims to Tan Soh Sim's estate in favor of Tan Boey Kee and the four adopted
children. The testamentary intentions of Tan Soh Sim were explained by Tan Boey Kee. It is
believed that Tan Soh Sim died without regaining consciousness. It was questioned whether
the instrument signed by Tan was valid when the estate was distributed. In accordance with
Section 26(a) of the Contracts (Malay States) Ordinance 1950, the instrument was deemed to
be a contract.The question arised, about the interpretation of what exactly mean my “near
relation”.As the Court of Appeal pointed out, in each situation, the terms "relationship" and
"near" must be applied and interpreted based on the customs of the group to which the parties
belong as well as the circumstances of the family involved. The Chinese tradition defines an
individual as a relation when they are adopted, and the status of the other person with respect
to which the question is raised determines whether the individual qualifies as a "near" relation
under section 26 of the Contracts Ordinance.The affection between adopted children and their
adoptive parents or siblings is almost certain to support adoption agreements between them.
But here, according to Chinese custom, the Khoo and Tans children are related to the four
adopted children of Tan Soh Sim only in a special and limited way which is not near. Tan
Boey Kee’s relationship to them is certainly more remote than that of the children, if indeed
any relationship existed. Accordingly, the court held that the instrument did not fulfill section
26(a) of the Contracts Act.

Referring to the this fact of case, As a father and son with too close of a blood relationship,
Pak Ali is entitled to give his land to his son Rahman as a birthday gift and without any
financial compensation. This transfer would coincide with Rahman’s 21st birthday.
Additionally, it is clear that any agreement or transfer made between Pak Ali and his son in
accordance with the prerequisites of Section 26(a) of the Contracts Act must first be satisfied
in order for the transfer of the property made between them to be deemed valid under
Malaysian law.As a conclusion, we can advice Pak Ali may without fear and in light of the
case law decided in favour of his position, transfer his land to his son Rahman without
receiving any compensation from Rahman and solely on the basis of "natural love and
affection" as required by Section 26 of the Contracts Act 1950 is valid.