UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY BUSINESS AND FINANCE

JANUARY 2020 TRIMESTER

UBML1053 BUSINESS LAW

TUTORIAL QUESTIONS
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TUTORIAL 6: Capacity to Contract and Formalities

1. Shiva a 17 year old student, entered into a contract to buy some books from
Wonderful Book Store worth RM 450 on credit basis. The payment must be made in 3
equal monthly instalments of RM 150 each. He also bought a luxury motorcycle
which cost RM 20,000 from John Kiew Motors so that it would be easier for him to
travel to school. Shiva promised to pay the price of the motorcycle within 30 days. Its
more than 2 months now, and Shiva had not make any payment in respect of the
goods bought. He has also not paid the rent of his room for the last 6 months,
amounting to RM 900. His landlord, Mr. Lee Sing requires your advice. Advise
Wonderful Book Store, John Kiew Motor and Mr. Lee Sing on whether they would be
able to recover their respective debts from Shiva.

2. The Contracts Act, 1950 does not stipulate the effect of an agreement entered into by
a minor and from the decided cases show that all contracts entered into by a minor is
void and a minor cannot sue or be sued under such contract. Although a contract
entered into by minor is void, nevertheless, there are five exceptions to this general
rule when the contract is still valid and enforceable. Briefly explain the validity of
scholarship agreement entered by minor.

3. Discuss the validity of a contract entered by a drunkard i.e. a person who is under the
influence of alcohol or intoxicating substances.