CHAPTER 8

Capacity to act

6 July 2024
 What is covered in this chapter?

• What is capacity?
• Minority and the contractual capacity of minors
• The ability of minors to enter into valid contracts
• Liability of an innocent minor in respect of an unassisted
contract
• Liability of a fraudulent minor on an unassisted contract
• Marriage and the contractual capacity of married women
 Essential elements of a contract

i. Formalities
ii. Lawfulness
iii. Capacity
iv. Serious intention
v. Communication – offer and acceptance
vi. Certainty of terms
vii. Reality of consent
viii. Possibility of performance
 CAPACITY

Means competence in the eyes of the law to:

• Have rights and duties
• Perform juristic acts
• Incur civil or criminal liability for wrongdoing
• Have ‘legal standing’
i.e. to sue or to be sued in one’s own name.
 CAPACITY

As a general principle, any juristic or natural person

• has complete and unrestricted control over his or

her affairs

• has full contractual capacity

CAPACITY TO ACT ON BEHALF OF JURISTIC PERSON
Self-imposed limitations on capacity to contract:
• Company Memorandum of Incorporation
Directors
May not rely on lack of capacity to act in certain circumstances
Shareholders claim damages
Ratification
Shareholders, directors or interested party to take legal action to prevent
director(s) for acting outside their capacity
• Business rescue proceedings

• Insolvency
CAPACITY OF NATURAL PERSONS TO CONTRACT

i. Minority
ii. Marriage
iii. Mental illness
iv. Intoxication
v. Prodigals
vi. Insolvency
vii. Criminal conviction.
viii. Alien enemy
 Capacity of natural persons: Minority

WHO ARE MINORS

A ‘child’ is a natural person under the age of 18 years.

A child who is unmarried is called a ‘minor’.

EFFECTS OF MINORITY

No contractual capacity under seven years – must be ‘represented’ by a guardian.

Limited contractual capacity from seven to 18 years - must be ‘assisted’ by a guardian.

 Minority
• WHO ARE GUARDIANS
• Married or civil partnership
o Both parents (marriage) or partners (civil partnership) are guardians
o Consent may usually be given by either guardian
o Some acts require consent from both guardians:
** The child’s marriage **civil partnership **Adoption
** Departure or removal from South Africa **Application for a
passport
** Sale or mortgage of any immovable property or right to that
property belonging to the child
• Female below 15 and male below 18 years – marriage - Home Affairs
• Mother is the sole guardian if unmarried or out of civil partnership
• Master High Court is the ‘upper guardian’ of all minors
 Minority
WHEN CAN MINORS ENTER INTO A VALID CONTRACT
• With the assistance of a guardian
• After marriage or civil partnership
• Customary marriage after 15 Nov 2000 – spouse is a major
• Tacit emancipation or general authority is given by a guardian (limited to business or occupation).
• Ratification:
By the minor on reaching majority
By a guardian
• Statutory exceptions:
o Medical treatment 12 years - if sufficient maturity and mental capacity ...benefits, risks, social implications
o Condoms and other contraceptives - 12 years + medical advice + medical examination
o Any woman can terminate pregnancy less than 13 weeks without consent of guardian
o Learner’s driving licence 17
o Post office savings account older than 7 years
o Will – 16 years
o Donation of body – 16 years
 Minority
LIABILITY OF AN INNOCENT MINOR TO AN UNASSISTED CONTRACT
• Protection of minors against their own weak judgment and contract therefore void
• Limping – better position of minor - choice
• If guardian assist or minor ratifies then able to sue for damages – valid contract
• MINOR: Remedy is restitutio in integrum - Full restoration of the situation the minor
was in before the contract was entered into.
• OTHER PARTY must be given back the minor’s enrichment at the time of the court
case.
• Example of motor bike (minor gets money back, other party gets motor bike back)
Other party claims enrichment
 Minority
LIABILITY OF A FRAUDULENT MINOR ON AN UNASSISTED CONTRACT
• Law should not allow dishonesty.
• Four theories:
i. Minor should be liable on the contract – NO – then fraudulent minor would
have more capacity.
ii. Minor should be stopped from claiming minority on estoppel - .
iii. Minor should be liable for delictual damages only.
iv. Minor should not be held liable on the contract to the other party
Not able to claim restitutio in integrum
Other party claims enrichment
 Marriage in community of property
Automatic position of married spouses prior to 1 November 1984:
Community of property before marriage
Community of profit and loss during marriage
Marital power (life necessities and public trader excluded)
Matrimonial Property Act of 1984:
Community of property
Community of profit and loss
No marital power
Since 1993 – marital power retrospectively abolished
2006 Civil Union Act
2 people of same sex = marriage
Automatically in community of property unless ante nuptial agreement
 Marriage out of community of property
ACCRUAL SYSTEM EXCLUDED
Every spouse or partner keep own property
No consent necessary
Keeps control of own estate – no joint estate

ACCRUAL SYSTEM INCLUDED

 Marriage out of community of property
FORMALITIES ANTENUPTIAL AGREEMENTS

In writing

+ duplicate

+ 2 parties initial and sign

+ guardians (if necessary)

+ two witnesses

+ Registered at Deeds Office

Mental illness
• All persons are presumed sane unless declared mentally disordered or mentally
ill by the High Court.
• Contract is void if the person could not understand its nature and effect.
• Contract is valid if the person was having a ‘lucid moment’.
Intoxication
Void if so intoxicated that he/she had no idea
Unjustified enrichment
Prodigality
Interested party apply at High Court to appoint curator
Contract on behalf of spendthrift otherwise void
Can be ratified
Insolvency
• Estate controlled by trustee
• May not dispose of any property
• May not enter into contracts that may be to detriment of estate
Criminal conviction
Not appointed as director
Alien enemy
No contracts with any person living in enemy territory