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Questions and Answers
What is legal capacity?
What is legal capacity?
Why is it important to assess a person's contractual capacity?
Why is it important to assess a person's contractual capacity?
Who are theNatural Persons without contractual capacity?
Who are theNatural Persons without contractual capacity?
What is the consequence of a contract entered into by a person without contractual capacity?
What is the consequence of a contract entered into by a person without contractual capacity?
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What is the burden of proof in cases of intoxication and contractual capacity?
What is the burden of proof in cases of intoxication and contractual capacity?
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What is juristic act?
What is juristic act?
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Who can assist a minor in a contract?
Who can assist a minor in a contract?
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What happens if a minor enters into a contract without assistance and it is prejudicial to them?
What happens if a minor enters into a contract without assistance and it is prejudicial to them?
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What is required for a spouse to sell or encumber immovable property?
What is required for a spouse to sell or encumber immovable property?
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In what situation can a minor conclude an agreement without assistance?
In what situation can a minor conclude an agreement without assistance?
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What is the effect of ratification of a contract by a parent or guardian?
What is the effect of ratification of a contract by a parent or guardian?
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When is an insolvent person's contractual capacity limited?
When is an insolvent person's contractual capacity limited?
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What is the purpose of restitutio in integrum?
What is the purpose of restitutio in integrum?
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What is required for an insolvent person to enter into a contract that may affect the insolvent estate adversely?
What is required for an insolvent person to enter into a contract that may affect the insolvent estate adversely?
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What is the nature of a married person's ownership in a joint estate?
What is the nature of a married person's ownership in a joint estate?
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What happens to a person's contractual capacity if they are not insolvent or a spouse?
What happens to a person's contractual capacity if they are not insolvent or a spouse?
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What is exempt from the written consent requirement in terms of the Matrimonial Property Act 88 of 1984?
What is exempt from the written consent requirement in terms of the Matrimonial Property Act 88 of 1984?
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What is the purpose of the written consent requirement in terms of the Matrimonial Property Act 88 of 1984?
What is the purpose of the written consent requirement in terms of the Matrimonial Property Act 88 of 1984?
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Who can be disqualified from being appointed as a company director?
Who can be disqualified from being appointed as a company director?
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Which of the following entities do not have their own contractual capacity?
Which of the following entities do not have their own contractual capacity?
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Who needs to act on behalf of juristic persons in the exercise of their contractual capacity?
Who needs to act on behalf of juristic persons in the exercise of their contractual capacity?
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What limits the State's ability to contract freely?
What limits the State's ability to contract freely?
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What is something the State cannot do with its powers and responsibilities?
What is something the State cannot do with its powers and responsibilities?
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Study Notes
Legal Capacity
- All persons (natural or juristic) have legal capacity, which is the ability to bear rights and duties.
- Legal capacity arises from legal personality and is not affected by age, etc.
- Ability to perform a juristic act (such as contracting) is limited.
- A juristic act creates legal consequences, such as creating, altering, and terminating legal rights and duties.
Contractual Capacity
- Contractual capacity is the competence to create rights and duties by concluding a contract with another person or persons.
- It's important to assess a person's contractual capacity to ascertain whether they are able to create, alter, or terminate legal rights and duties.
Natural Persons without Contractual Capacity
- This category includes people who cannot appreciate the nature and consequences of their acts, such as:
- Mentally ill persons
- Infants
- People under the influence of drugs or alcohol to a degree that they did not know they were entering into an agreement
- Contracts concluded by such persons are void.
- The burden of proof lies with the person who alleges that the other party lacked contractual capacity.
Juristic Persons
- Juristic persons have contractual capacity, subject to certain limitations.
- Entities such as partnerships and trusts do not have their own contractual capacity, but rely on the contractual capacity of their partners and trustees.
- Juristic persons need to have natural persons act on their behalf in the exercise of their contractual capacity.
The State
- The State and its various organs have contractual capacity, but with limitations.
- The State's ability to contract freely is limited by various regulations, such as tender procedures.
Natural Persons with Limited Contractual Capacity
Minors
- Minors are assisted by a parent or guardian.
- Consent from a parent or guardian can be given before, at the time of contracting, or after (ratification), making the contract valid from the beginning.
- Minors can, without assistance, conclude certain agreements that only grant them rights and not obligations (e.g., acceptance of a donation).
- Contracts concluded without assistance are voidable.
Minors (Continued)
- The High Court (Upper Guardian) can consent on behalf of the minor if the parent or guardian refuses.
- The High Court can set aside consent.
- Minors are bound by such consent, but the contract can be set aside if it can be shown that it was prejudicial to the minor at the time of contracting.
- Restitutio in integrum (an action to return the parties to their pre-contracting position) can be done if the contract was prejudicial to the minor.
Married Persons
- Married persons are co-owners of the joint estate in equal and undivided shares.
- Parties can generally contract on behalf of the joint estate without consent.
- However, in certain transactions, the spouses' contractual capacity is limited by the Matrimonial Property Act 88 of 1984, including:
- Selling or pledging household furniture, or donating any asset of the joint estate
- Withdrawing money from the other spouse's bank account, or selling shares or investments (written consent required)
- Selling or encumbering immovable property or binding oneself as surety (written consent with two witnesses required)
Insolvents
- The mere fact of being insolvent does not necessarily affect a person's contractual capacity.
- Once a court grants an order of insolvency, placing the person's estate under sequestration, their contractual capacity is limited.
- During sequestration, the insolvent person may still validly enter into contracts, but not dispose of any assets of the insolvent estate.
- The insolvent person requires written consent of the trustee for any contract that may affect the insolvent estate adversely.
Natural Persons with Full Contractual Capacity
- If a person does not fall into one of the above categories, they are considered to have full contractual capacity.
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Description
Test your understanding of legal capacity in contract law, including the ability to bear rights and duties, and the limitations of performing juristic acts. Assess your knowledge of legal personality and its implications on contracting. Evaluate your comprehension of creating, altering, and terminating legal rights and duties.
