contractual capacity

• Contractual capacity


  The capacity to perform juristic acts
• Legal capacity


  The competence to have rights and duties and incur civil or criminal liability
• Every legal subject, natural or juristic person, has legal capacity
• Not every person who has legal capacity has capacity to act
• Only natural persons have contractual capacity, however, not all natural persons (can be limited)
• Juristic persons are only capable of performing juristic acts through human representation
• In certain circumstances a person's capacity can be limited this is determined by the law's view of that person's ability to form and declare a will
• One may also lose their capacity to act
• Contractual capacity may also be limited by various factors
• Factors influencing contractual capacity


  • Age
  • Marriage
  • Mental deficiency
  • Influence of alcohol or drugs
  • Prodigals
  • Insolvency
• Contractual capacity


  The ability to understand the nature of the contract and appreciate the legal consequences of concluding a contract
• 0-7 years old


  • No capacity to act, cannot conclude any contract whatsoever
  • Insufficient level of development to enable him or her to form sound judgment of contractual obligations
• 1. 17 years old


  • Has limited capacity to act, may perform juristic acts with assistance of parent or guardian
• Guardian's assistance


  Assenting and being present at the conclusion of the contract, or of its prior authorisation or subsequent ratification
• Effect of the guardian's assistance is that the contract becomes enforceable by and against the minor (guardian incurs NO personal liability or rights in that contract)
• Age of majority in SA is 18 years and not 21 years
• Minors with limited capacity to act

  • If a contract concluded on behalf of a minor is to his/her detriment, the minor may apply within 1 year after reaching majority to the High Court to cancel the contract and claim restitution of everything that has been performed
  • A minor is allowed to conclude contracts without any assistance if the contract is exclusively to his/her benefit (only rights are acquired and no obligations imposed on the minor)
• A person will have full capacity to act at the age of 18 (age of majority), unless a persons independent ability is flawed in some way such as a mental deficiency
• Statutory exceptions where a minor may conclude contracts without assistance


  • A minor (+ 7 years) may withdraw monies deposited in his account
  • A minor (+16 years) may make a valid will
  • A minor (+16 years) may make deposits with and withdrawals from a bank
  • Female minor may consent to the termination of pregnancy at any age
  • Children over 12 may consent to certain medical procedures
• Special situations regarding minors' contractual capacity


  • Contracts for which the guardian's assistance is insufficient (selling of immovable property)
  • Tacit Emancipation (guardian allows the minor economically independent existence)
  • Contracts which the minor concludes without the necessary assistance (with ratification = minor is bound, without assistance = minor not bound)
  • Fraudulent misrepresentation of majority
• In community of property


  Spouses are automatically married in community of property unless they agree to the contrary
• In community of property


  • One common joint estate (each party has a separate estate before the marriage and it becomes joined once married)
  • The joint estate acquires the profits and bears the losses
  • The general rule that each spouse has full capacity to bind the joint estate is qualified with regard to certain assets and certain transactions where the other spouse's consent is required
  • Debts can be recovered from both or either spouse but are sued jointly (exception - debt incurred for necessities of the household may be sued jointly or separately)
• Consent required in community of property


  • Written consent for immovable property/investments (in the presence of 2 witnesses), withdrawal of money from account of other spouse, institute legal proceedings against the other spouse or defend legal proceedings against them
  • Verbal consent for other acts (donations that prejudice the other party or moveable property of the common household)
  • Ratification (approval except for immovable property or acts as a surety)
• If the third party did not know consent was needed, the contract is deemed to have consent
• Out of community of property

  Each spouse retains his/her separate estate and each has full capacity to act only with his/her own estate
• Spouses can be held jointly and severally liable for necessities of the common household
• Accrual


  Net value of a spouse's estate AT the dissolution of the marriage VS NET commencement value
• Mental deficiency


  Unable to understand or appreciate the nature or consequences of his or her conduct - cannot form the necessary will to conclude a contract
• The contract is void, no rights or duties are created by it
• A curator must be appointed when a person has been certified by a court as mentally deficient
• The person who alleges contractual incapacity must prove it
• Influence of alcohol or drugs


  A person who is in such a state of intoxication caused by alcohol or drugs that he or she does not appreciate the nature and consequences of his/her actions, or who is unable to control the actions, is incapable of forming a will
• Cannot legally perform juristic act
• Void and unenforceable
• The person alleging incapacity must prove it
• Prodigal


  A person's propensity to squander his or her own money in an irresponsible or extravagant manner and incapable of managing his/her own affairs
• Only when the court declares a person a prodigal then will that person be forbidden to act without the consent of a curator appointed to him or her
• Prodigal has limited capacity to act
• Only agreements that benefit the prodigal without any obligations may be concluded without the consent of the curator
• Unassisted contracts by the prodigal are voidable and can be ratified by the curator