Theme 3 Pt 1 Flashcards
LEGAL CAPACITY
1) All persons (natural or juristic) have legal capacity.
2)Legal capacity is the ability to bear rights and duties.
3) Arises from legal personality and not
affected by age, etc
Contractual capacity:
The competence to create rights and
duties by concluding a contract with another person or persons
NATURAL PERSONS WITHOUT
CONTRACTUAL CAPACITY
1)Mentally ill persons.
2) Infans.
3) Intoxication: May result in the temporary loss of contractual capacity but only if the person was under the influence of drugs or alcohol to a degree that he/she either did not know that he/she was entering into an agreement at all or had no idea of its provisions
NATURAL PERSONS WITHOUT
CONTRACTUAL CAPACITY and the consequences of their acts
1) Contracts are void.
2) Burden of proof: He who alleges
NATURAL PERSONS WITH LIMITED
CONTRACTUAL CAPACITY
1) Minors
Emancipation of minors:
1) Express or tacit general consent by
parent/guardian for the minor to enter into specific type of agreements without obtaining additional consent or assistance
Minors
1) Assisted by parent/ guardian.
2) Consent from parent/guardian given before, at the time of contracting or even after (ratification: Contract become valid
ab initio)
Minor
1) May without assistance conclude certain agreements: Obtain only rights and no obligations: E.g. Acceptance of a
donation.
2) Rights and duties: Minor and not parent.
3) Contracts concluded without assistance: Voidable.
Exceptions for Minors:
1) High Court (HC) (Upper guardian) can consent: If parent/guardian
refuses.
2) HC can set aside consent.
3) Minors bound by such consent but 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
1) An action to return the parties to the position that they were in
prior to contracting.
2) Can be done, even if guardian assisted, if
contract was prejudicial to the minor.
3) Will be denied if the minor fraudulently
pretended to be a major at the time of conclusion of the
contract.
Married Persons (In Community of Property):
1) Co-owners of the joint estate in equal and undivided shares.
2) Parties can generally contract on behalf of the joint-estate without consent.
In certain transactions, the spouses contractual capacity is limited by the Matrimonial Property Act 88 of 1984, these include:
1) Selling or pledging household furniture, or donating any asset of the joint estate,
2) Withdrawing money from the other spouses bank account, or selling shares or
investments (Written consent)
3) Selling or encumbering immovable property or binding oneself as surety (Written consent with two witnesses)
4) Transactions in the ordinary course of business of the other spouses business are
exempted from this requirement.
Insolvents:
1) The mere fact a person is insolvent does not necessarily mean that such a person’s contractual capacity is affected
2) Only once a court has granted an order of
insolvency placing the person’s estate under sequestrations his/her capacity limited in respect of certain transactions [Sections 23 and 24 of the Insolvency Act 24 of 1936.
3) During sequestration, the insolvent person may still validly enter into contracts provided that the person does not
purport to dispose off any assets of the insolvent estate.
4) Furthermore, the insolvent person requires a written consent of the trustee for any contract that is likely to affect the insolvent estate adversely [See sections 23 ad 24 of the Insolvency Act}
Juristic Persons do have contractual capacity, subject to:
1) Entities such as partnerships and trusts do not have their own contractual capacity, but it is rather the contractual capacity of the partners and trustees which
is relied upon
2) Even juristic persons with contractual capacity need to have natural persons act on their behalf in the exercise of their contractual capacity. These natural
persons in turn need to be duly appointed representatives.
THE STATE:
1) The State and its various organs have contractual capacity.
2) State cannot contract out of its powers and responsibilities.
3) The State’s ability to contract freely is limited owing to various regulations, most notably tender procedures.
