Capacity Flashcards
Capacity in General
Capacity in General—Capacity is a prerequisite for many types of juridical relations, specifically, those juridical relations created by juridical acts (whether unilateral or multilateral). The term “capacity” is not defined in the Civil Code. In a broad sense, capacity is the ability to have legal rights and duties (known as capacity of enjoyment) and the ability to exercise legal rights and duties (known as the capacity of exercise)
Capacity is Presumed unless there is an exception.
Incapacities of Enjoyment
Incapacities of Enjoyment—Some persons cannot acquire, or hold, certain kinds of rights. The inability to hold certain rights is “incapacity of enjoyment.” These are always limited in nature, involving specific persons and specific kinds of rights.
Incapacity of Exercise
Incapacities of Exercise—Some persons, while they can acquire, or hold, rights, cannot exercise them. In some cases, as when the cause for incapacity is extended in duration, the law permits a person suffering from incapacity of exercise to transact through a representative. The general rules on contractual capacity are rules of capacity of exercise.
Always pervasive, affecting all types of juridical acts for persons with certain characteristics.
The rules of contractual capacity are rules of “incapacity of exercise”
CC Art. 1918
All persons have capacity to contract, except unemancipated minors, interdicts, and persons deprived of reason.
Those who lack capacity
Those Who Lack Capacity—“All persons have capacity to contract, except unemancipated minors, interdicts, and persons deprived of reason.” La. Civ. Code art. 1918.
Effects of Incapacity
Generally
Relative Nullity—“A contract made by a person without legal capacity is relatively null and may be rescinded only at the request of the person or his legal representative.” La. Civ. Code art. 1919. What is nullity? (La. Civ. Code art. 2029) How does “relative nullity” differ from absolute nullity? (La. Civ. Code arts. 2030–2033)
Right to Require Confirmation or Rescission—“Immediately after discovering the incapacity, a party, who at the time of contracting was ignorant of the incapacity of the other party, may require from that party, if the incapacity has ceased, or from his legal representative if it has not, that the contract be confirmed or rescinded.” La. Civ. Code art. 1920. What is “confirmation” of a contract? La. Civ. Code art. 1842.
Effect of Rescission—“Upon rescission of a contract on the ground of incapacity, each party or his legal representative must restore to the other what he has received thereunder. When restoration is impossible or impracticable, the court may award compensation to the party to whom restoration cannot be made.” La. Civ. Code art. 1921.
Illustration—Carl, who is a 17 year old minor, purchases a used car from Dave’s Discount Dealer. Assuming some exception to the general rule (below) does not apply, who can rescind the contract? How long do these individuals have to sue for rescission of the contract (in other words, when does the action for rescission prescribe, if at all)? What is the effect of “rescission”? What if, prior to the suit for rescission, the car is damaged in an accident or in a flood?
Incapacity - Exceptions
(i) Minors’ contracts for support, education & business—“A contract by an unemancipated minor may be rescinded on grounds of incapacity except when made for the purpose of providing the minor with something necessary for his support or education, or for a purpose related to his business.” (La. Civ. Code art. 1923)
a. Illustration—Emily, who is 17, is an artist with a store on Etsy. She purchases $5,000 worth of art supplies from Hobby Lobby. Later, she seeks, through her legal representative, to rescind the contract on the basis of her incapacity. Will she prevail?
(ii) Contracts made in reasonable reliance on representations of majority—“The mere representation of majority by an unemancipated minor does not preclude an action for rescission of the contract. When the other party reasonably relies on the minor’s representations of majority, the contract may not be rescinded.” (La. Civ. Code art. 1924)
a. Illustration—Frank is 17, but appears to be much older. He has in his possession an excellent fake identification stating that he is 19. Frank walks into a gym and signs a contract for a year-long membership. The gym’s employee met with Frank and looked at his identification to verify his name, address, and age prior to allowing Frank to sign. Can Frank, through is legal representative, rescind this contract on the basis of his incapacity?
(iii) Contracts made with noninterdicted persons deprived of reason—Protection of Innocent Party in Onerous Contracts—“A noninterdicted person, who was deprived of reason at the time of contracting, may obtain rescission of an onerous contract upon the ground of incapacity only upon showing that the other party knew or should have known of the incapacity.” (La. Civ. Code art. 1923).
a. Illustration—Rabin v. Blazas, 357 So. 2d 221 (La. App. 4 Cir. 1998)—Describe the contract at issue. Is it onerous or gratuitous? How do you know? Which party argues that the contract should be rescinded for lack of capacity? On what basis does that party argue he or she is incapacitated? Is he or she successful? Why or why not? Who bears the burden of proof here?
(iv) Attack on Noninerdicted decedent’s contracts—“A contract made by a noninterdicted person deprived of reason at the time of contracting may be attacked after his death, on the ground of incapacity, only when the contract is gratuitous [see La. CC 1477], or it evidences lack of understanding, or was made within thirty days of his death, or when application for interdiction was filed before his death.” (La. Civ. Code art. 1926] What is the purpose for these rules?
Policy: The laws regarding incapacity serve to help the party who is incapacitated, but here that person has died. Therefore, they serve to add restrictions on the heirs or interested parties ability to invalidate contracts made by the person who has supposedly incapacitated.
