Unit 7- Legal Subjects

Question 1

What do legal rules do?

Answer 1

Legal rules impose duties upon and assign competences and rights to legal subject

Question 2

What are the 2 main categories of legal subjects?

Answer 2

1. Natural persons
2. Legal person

Question 3

Legal personhood for natural persons

Answer 3

• Human beings have legal personhood since birth
• When they die most of their rights and duties go into probate, except some which shall cease
• Property rights are not extinguished but are passed down on heirs

Question 4

Are embryos considered natural persons?

Answer 4

No they are not

Question 5

When do people acquire legal capacity to act?

Answer 5

When they reach the majority age of their respected jurisdiction

Question 6

What are the two types of incapacitated persons

Answer 6

• Protective incapacity (minors, impaired or disabled)
• Punitive incapacity (legal disquaification)

Question 7

Characteristics of minors

Answer 7

• Attain the capacity to act when they reach mayority
• Lack the capacity to act and enter a valid contract
• To access capacity to act –> emancipation granted by court

Question 8

Characteristics of legal acts by minors

Answer 8

• There’s a threshold (7 years) under which contracts entered by a minor are null
• They have limited contractual capacity

Question 9

What are the two types of incapacitated adults?

Answer 9

• Protective incapacities: impaired or disabled adults
• Punitive incapacities: legal disabilities (conviction for committing a crime)

Question 10

Characteristics of legal acts by incapacitated adults

Answer 10

• Contracts entered into by an incapacitated adult are invalid in the same term like minors
• Legal systems tend to be set forth special requirements under which contracts are deemed valid

Question 11

What are legal representatives in civil law jurisdiction?

Answer 11

They can be delegated the power to enter into legal transactions on behalf of a minor

Question 12

What are legal representatives in common law?

Answer 12

Common law jurisdiction traditionally don’t acknowledge any legal representative of minors or incapacitated adults, they appoint a deputy to act case by case on behalf of a minor or incapacitated adult

Question 13

What is incapacity de facto?

Answer 13

Legal transaction performed by an adult is temporarily impaired by drunkenness, drug abuse…

Question 14

When can incapacity de facto be avoided?

Answer 14

• The disorder was so serios that it fully neglected the capacity to form contractual will
• Dealing with a contract the counterpart was in bad faith

Question 15

What is the legal rationale to protect consumers?

Answer 15

Based on the notion of market failures, such as inequalities of bargaining power between a consumer and a business and information asymmetries

Question 16

What is the notion of consumers

Answer 16

“A consumer is a natural person who is acting outside the scope of an economic activity”

Question 17

What has been the effect of consumers?

Answer 17

Has become the factor triggering the application of a distinct set of rules known as consumer law

Question 18

What happens with mixed jurisdictions when it comes to consumers?

Answer 18

When consumption concludes for both professional and personal purposes, it becomes controversial

Question 19

What is dual purpose of contract

Answer 19

To establish if the natural person is acting as a consumer or a provider in the contract

Question 20

What happens if a natural person is acting predominantly under the identity of its business?

Answer 20

They cannot be protected under consumer law since the legislator wouldn’t see them as consumers in need for protection

Question 21

What are legal entities under private law divided into?

Answer 21

• Corporations
• Unincorporated legal entities

Question 22

What are the characteristics of corporations?

Answer 22

• Completely autonomous entity
• Discrete personality
• Separate the owners as to their management

Question 23

What are the characteristics of unincorporated legal entities?

Answer 23

• Collection of individuals
• Share property to some extent
• More personal liability

Question 24

What are rules on liability/ agency?

Answer 24

By its nature, a legal entity, being fictitious can act through the agency of natural persons

Question 25

What are the three areas of interaction in rules of agency?

Answer 25

• Agents and principles (internal relationship)
• Agents and the third parties with whom they deal on their principal’s behalf (external)
• Principals and the third parties where the agents deal

Question 26

What happens if there is ‘defect in consent’ (mistake or fraud)?

Answer 26

The state of mind taken into consideration is the one of the agents because they are the natural person who acted on behalf of the legal entity

Question 27

Characteristics of non profit ORGANISATIONS

Answer 27

• Established to further a social cause
• Partly exempted from taxation
• Prohibited from distributing their income to shareholders, leaders or members

Question 28

Two types of non-profit CORPORATIONS

Answer 28

• Foundations (corporation soles)
• Association: corporation aggregates

Question 29

What are the two constitutional documents?

Answer 29

Memorandum of association and articles of association: the key constitutional document of a company, which inter alia spells out its name, its purpose, and its capital

Bylaws: The constitutional document that defines the internal structure and regulate the functions and decision- making processes of its bodies

Question 30

What legal entities of private law divided into?

Answer 30

• Incorporated businesses
• Unincorporated businesses

Question 31

What are the two types of incorporated businesses?

Answer 31

• Join stock company/ public limited company (PLC)
  Ownership is subdivided into shares that are fully transferable and can be quoted and tradable on stock exchange
  Can’t be managed directly by the shareholders
• Limited liability company
  Shares are not tradable on stock exchange
  Can be managed by shareholders