Question 1: (a)(i) Last January, Missy, the 17 year old daughter of a wealthy businessman, bought a luxury car, Audi

R8, worth RM 900,000. The car has now been delivered but she is unable to pay for it.

First of all, the Law of Contract has been defined as an agreement which is legally binding between the both of parties. A contract simply means an agreement between the parties however the agreement has some important element within as it alone does not stand to have a binding contract. In a contract, there should have all the elements as proposed which will be offer, acceptance of offer, consideration, intentions to create legal relations, capacity, consent, legality and possibility of performance.

In this particular situation, the element of capacity is lacking in this contract. Capacity to a contract defines us that parties in a contract must have the capacity to make a contract. In a simpler way, capacity is referred as legal ability to enter into a contract and the law generally states that everyone has the capacity to a contract except for certain circumstances which will be discussed in the following paragraph. Missy is 17 and underage, which makes her legally incapable of capacity due to her minor status, and therefore any contracts made by Missy would be void ab initio except for certain exceptions, such as contracts for necessaries, scholarship contracts and insurance contracts.

Section 11 of the Contracts Act 1950 is about contracts entered into by those who have no capacity. This section states that a person must satisfy the age of majority according to the Section 2 of the Age of Majority Act 1971 to which the person is subjected to. Furthermore, he or she must be of sound mind which means that both the offeror and offeree should be able to understand the contents of a contract and by forming a wise decision. The third and last point in Section 11 would be a person who has been disqualified from contracting by any law to which he or she is subjected to. The case law related to this section would be Mohori Bibee v Dhurmodas Ghosh (1903) and the general rule that we could conclude from the case would be that contracts being involved by minors are all void (Capacity To Contract, Scribd).

In contrary, Section 69 of the Contracts Act 1950 states that if a minor is supplied by another person with necessaries suitable to his or her condition in life, the person who has provided such supplies is entitled to be reimbursed from the property of the minor. In this statement, necessaries are things which are needed for the living and for a reasonable comfort of the minor. At this point of view, the related case study will be Nash v Inman. In this case, a tailor sued the minor to whom he had supplied the clothes including 11 fancy waistcoats. The minor was currently an undergraduate at Cambridge University and the clothes were suitable for the minors lifestyle. It was then further decided it was not a necessity for the minor as he already had sufficient clothing. Minors are subjected to pay for things which are necessity for them only and so no contract was enforceable (Business Law, Scribd).

In this case study, Missy is now 17 years old. According to Section 2 of the Age of Majority Act 1971, in order for a contract to be valid, the individual should be at the age of majority, which is 18 years and above. (Malaysian Law Majority Act 1971, Commonlii). In this case, Missy, being underage, does not have the capacity to enter into a contract (minors incapacity). The general rule proposed under Malaysian Law and also by relating the case study of Mohori Bibee v Dhurmodas Ghosh states that a contract which entered by minors are void. On the other hand, there is an exception where if the things is necessary for the continued existence and reasonable comfort of the minors life, then the contract is valid. The car bought by Missy an Audi R8 worth RM900,000- is nevertheless regarded as a luxury, not a necessity. Even though taking into account Missys social status as a wealthy businessmans daughter, the RM900,000 luxury car is not a necessity for her as she can buy any car which will cost much lesser. Furthermore, the Audi R8 is not essential for Missys maintenance, nor does it fulfill the exceptions to the general rule of Section 69 of Contracts Act 1950. Pheng and Detta states that luxurious articles are excluded from the definition of necessaries.

The contract is regarded as void ab initio if Missy chooses to void it, in which she will not be liable to pay for the car, and the car supplier cannot sue Missy because there was no valid contract in the first place, and therefore it isnt a breach of contract. The

supplier would return the Missys consideration with which she had parted- returning her deposit or partial payment in this case.