Can a Company Take Legal Action Against a Minor for Non-Payment?

Question from az, Can a Company Take Legal Action Against a Minor for Non-Payment?

Answer from AI:

When a company enters into a contract with a minor, there are special considerations to take into account due to the individual’s age. In Malaysia, as in many jurisdictions, the age of majority is typically 18 years old. This means that individuals under this age are considered minors and are subject to certain legal protections when it comes to contracts.

Contracts with Minors in Malaysia

In general, contracts entered into by minors are considered voidable at the minor’s discretion. This means that the minor has the option to either honor the contract or disaffirm it. There are exceptions to this rule, such as contracts for necessities (goods and services that are essential for the minor’s life and well-being) which are usually binding.

Legal Steps the Company Can Take

Given that the student in question is 17 years old and has failed to make the agreed-upon down payment for the car, the company may find its options for legal recourse to be limited. Here are some general steps the company might consider:

1. Review the Contract: The company should first review the terms of the contract to determine if there are any clauses that address non-payment or breach of contract by a minor.
2. Attempt to Resolve the Issue: Before taking legal action, the company may attempt to resolve the issue directly with the student or the student’s guardians.
3. Seek Legal Advice: It is advisable for the company to consult with a legal professional who can provide guidance on the matter, taking into account the specifics of Malaysian contract law and the protections afforded to minors.
4. Consider Alternative Dispute Resolution: The company might explore mediation or arbitration as a way to settle the dispute without going to court.

Challenges in Enforcing the Contract

The company should be aware that enforcing a contract against a minor can be challenging. If the contract is deemed voidable and the minor chooses to disaffirm it, the company may not be able to enforce the contract or recover the down payment. Additionally, if the contract is for a non-essential item, which a car like the Honda CT likely would be, the minor has a stronger case for disaffirmation.

Recommendations for the Company

• Consult with Legal Counsel: The company should seek the advice of a lawyer who specializes in contract law to understand the potential outcomes and legal strategies.
• Consider the Minor’s Age: If the student is close to reaching the age of majority, the company may decide to wait and see if the student will fulfill the contract terms upon turning 18.
• Review Company Policies: The company may also want to review and possibly revise its policies on entering into contracts with minors to prevent similar situations in the future.

Conclusion

While the company may feel aggrieved by the student’s failure to pay the down payment, the legal protections for minors in contract law can make it difficult to take action. It is important for the company to carefully consider its options and seek legal advice to determine the best course of action. For more information on contract law and minors, the company can refer to resources such as the Attorney General’s Chambers of Malaysia.

Please note that this information is general in nature and should not be construed as legal advice. It is always recommended to consult with a legal professional for personalized advice.