This is a case on the capacity of an infant to contract
Facts of the Case
The plaintiff (Government of Malaysia) entered into an agreement with the first defendant (Gurcharan Singh) as the promisor and the second and third defendants as sureties for providing a course of training at a Malayan Teacher's Training Institution. The first defendant required to serve the Government as a teacher for 5 years but he had only served 3 years 10 months when he resigned. Thus, he had breached the agreement.
Plaintiff claim for a sum of $11,500 being the alleged amount spent by the Government for the first defendant’s education as compensation. At the time of entering into contract, the first defendant was an infant and the defence was essentially that the contract entered into by the first defendant was void and that consequently the second and third defendants were not liable. Alternatively, it was pleaded that as the first defendant had served the Government for 3 years 10 months out of the contractual period of 5 years, the amount claimed was not reasonable compensation.
Issues of the Case
Whether an infant is liable to a breach of contract
Whether the second and third defendant is liable to the breach of contract
Whether the first defendant, second and third defendant as sureties are liable on a claim for necessaries
Whether the amount on the claim for necessaries by the plaintiff is reasonable
Judgments of the Court
The defendants submit that the contract was void because when the contract was entered.
The Court held that it is settled law that under the Indian Contract law and our Contracts (Malay States) Ordinance 1950, the contract is void and not merely voidable. In an Indian case, Mohori Bibi & Anor v Dhurmodas Ghose (1902-3) LR 30 IA 114, the Privy Council referred to s.11 of the Indian Contract Act which is in pari materia (on the same matter) with s.11 Contracts (Malay States) Ordinance 1950 (It is same as the current provision under s.11 of the Contracts Act 1950) as follows:
“11. Every person is competent to contract who 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.”
Reading it together with s.68 of the Indian Contract Act which is in pari materia with s.69 of Contracts (Malay States) Ordinance 1950 (It is same as the current provision under s.69 of the Contracts Act 1950) as follows:
“69. If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.”
The Privy Council held that an infant is incapable of entering into a contract and he is not liable even for necessaries and that no demand against necessaries is enforceable against the infant, however a statutory claim is enforceable against the infant’s estate.
(Note: s.2 of the Age of majority Act 1971 states that all person under the age of 18 is a minor or an infant)
The court then referred to the Common law case of Nash v Inman (1908) 2 KB 1 which held that an infant is incapable of making a contract but it a man satisfies the needs of the infant by supplying the infant with necessaries, the law imply an obligation to repay him for the service rendered and will enforce that obligation against the estate of the infant.
The court held that the second and third defendant will be liable as sureties to the contract if the first defendant is found to be liable for the breach of contract. S.81 of Contracts (Malay States) Ordinance 1950 (It is same as the current provision under s.81 of the Contracts Act 1950) states:
“81. The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract.”
The next issue which the court needs to decide was whether the contract is a contract for necessaries. The court held that there is no statutory definition of what are necessaries. It is a question of fact and law and the fact must be found on the evidence adduced. Each case had to be decided on its facts and whether what is supplied to the infant is a necessary suited to the infant’s condition.
It was also pointed out by the defence that the contract merely stipulated for training at a Malayan Teacher’s Training Institution, in fact the students was sent to Kirkby, England. It was suggested that if training to be a teacher was a necessary, the increased expenditure of selecting an institution in England is preference to a local institution will then remove it from being a necessity.
In the present case, it is a fact that admission to the teaching profession or service is only possible through training in a Government institution, which cannot be paid for or bought but must be applied for and awarded on a scholarship basis.
If a student has any interest in becoming a teacher, then his ambition could only be met by admission to a training institution and that he could secure only by applying for the same and being selected for it. If he can be said after successful training to be meeting the needs of the country for qualified teachers in a developing and rapidly expanding country, it must be equally true to say that in so doing he has had his own needs met and satisfied.
The Court considered the opinion that the decision to send the infant to England and not to a local training institute does not, per se, take the provision out of the class of necessaries. The decision that was taken was undoubtedly made on a variety of factors, for example, availability and suitability. The court’s view is that the word "necessaries" must be construed broadly.
In the circumstances of this case, the provision of professional or vocational training for the first defendant in a Teachers' Training Institution to enable him to qualify for and accept the appointment as a teacher is a provision for necessaries. Hence, the first defendant is liable for the repayment of the sums expended on his education and training as being expended on necessaries. His obligation from his contract in his infancy be met from his estate but in the circumstances of this case, the first defendant has at the hearing reached the age of majority thus the court hold him liable personally.
On the issue of the amount of the claim, the first defendant was paid monthly salaries and the generally accepted procedure of termination by either side is by giving one month's notice. Therefore, the court held that the first defendant had still to serve 1 year 2 months out of the stipulated 5 years. On the fraction of 14/60 of $11,500, the amount due would be $2,683 to the nearest dollar. First defendant would have to pay to the Government of Malaysia $2,683.
Principles of the Case
An infant has not capacity to enter into a contract and the contract entered will be void. However, a statutory claim is enforceable against the infant’s estate for the supply of necessaries to the infant.
The word “necessaries” under s.69 of the Contracts Act 1950 must be construed broadly. It is a question of fact and law and the fact must be found on the evidence adduced.
Comments