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The rules on legal capacity - Coggle Diagram
The rules on legal capacity
Minors
All European jurisdictions set the age of legal capacity at 18
English law allows a minor to validly enter into a "contract for necessaries"(s. 3 (3) Sale of Goods Act 1979)
Necessaries: "goods suitable to the condition in life of the minor or other person concerned and to his actual requirements at the time of the sale and delivery
What the minor requires at the relevant certain point in time and that is reasonable to acquire in view of his "condition in life)
Minor's income and position need to be taken into account on what is reasonable (Sale of Goods Act 1979 s. 3 (2))
Employment, apprenticeship and training contracts are binding on the minor, provided that they are on the whole to the minor's benefit (Proform Sports Management Ltd v Proactive Sports Management Ltd 2006)
No institution of a statutory representative
In French law the main principle of contracts entered into by minors is they can be invalidated (Arts. 388, 1145 and 1146 CC)
It is the administrateur légal who acts on behalf of the minor. Art. 388-1-1 CC: "The statutory administrator acts as an agent for the minor in all civil transactions except cases where the law or usage authorises minors to act for themselves"
Minors have capacity if law or usage says so (capacité usuelle) (Art. 1148 CC)
Minors have capacity in normal transactions of which it is customary that a minor of a certain age performs them alone. It must not pose a risk to the minor's financial position and are in line with the lifestyle the minor is used to
Even day-to-day act can be annulled in case it brings an economic disadvantage (lésion) to the minor (Art. 1149 CC)
The ratio behind legal incapacity is not that a minor is not allowed to contract but he is not allowed to damage his own position. Therefore, the minor can only invalidate a contract if he proves that he would otherwise suffer an economic disadvantage (Art. 1151 CC)
German legal tradition puts emphasis on the consent of the parents as a necessary requirement for a valid contract. It also distinguishes between two age categories (0-7 & 7-18) (§§ 104-110 & 113 BGB)
0 to 7-year-olds are deemed wholly incapable of making rational decisions (§§ 104 (1) & 105 (1))
From the age of 7-18, there are some possibilities to enter into a valid contract (§ 106-113)
If the minor obtains only a legal benefit, the contract is valid without the consent of a parent (§ 107). The minor must not incur any obligation
A contract entered into thanks to the money that a minor has received from a parent for a specific purpose or for free disposal is valid (§ 110)
Dutch BW Art. 1:234: " 1. In so far as the law does not provide otherwise, minors have the legal capacity to perform juridical acts, provided they are acting with the consent of their legal representative. 2. Consent may be granted only permission for a specific juridical act or for a specific purpose. 3. Consent is presumed to have been granted to a minor if it relates to a juridical act of which it is generally accepted practice that it is performed independently by minors of his age."
Minor needs parental consent in order to perform a valid juridical act
Consent is presumed to have been granted (cannot be rebutted by the parents) if a minor performs a juridical act "of which it is generally accepted practice that it is performed independently by minors of his age)
Adults in need of protection
Legally incapacitated adults: usually suffer from a mental disability and are therefore formally declared incapable of entering into valid legal transactions (curatelle, curatele, wardship) (Art. 428, 440 CC & Art. 1:378 BW)
German law performs legal incapacity by way of Betreuung (§ 1896 BGB): custodian is appointed by the court to take care of the affairs of the person in so far as this is necessary
The court can decide that a person can validly perform certain types of juridical acts with the consent of the custodian but if the person binds himself to a transaction that only confers a legal advantage or concerns a trivial matter, he is bound anyway (§ 1903)
English law shies away from declaring someone completely incapable of participating in legal life and has adopted special legislation to reflect this e.g. the Mental Health Act 1983 and Mental Capacity Act 2005)
France has less intrusive protective measures to safeguard the interests of adults e.g. temporary measure of sauvegarde de justice that allows a court to invalidate lesionary transactions
Legal incapacity of an adult in France and the Netherlands can lead to the contract entered into as being able to be avoided (set aside) by the legal representative/regarded as void
Exceptions to this include cases where the transaction is beneficial to the adult or concerns contract of daily life (§ 1903 BGB, Art. 1148 CC, Art. 1:1381 (3) BW)
Other adults: people who are not formally declared incapable or in need of a custodian by a court decision, but who do suffer from some mental disorder. In particular if this disorder is only of a temporary nature or not yet diagnosed, it is not likely that the patient is formally incapacitated. People can also be prevented from making rational decision as a result of a psychosis or blackout
In German law § 105 (2) BGB: "Also void is a declaration of intent that is made in a state of unconsciousness or temporary mental disturbance."
Any reliance of the other party is not relevant
Disorder must be so serious that it fully negates the ability to form one's will
Exception is that everyday transactions are valid (§ 105a BGB)
In French law Art. 414-1 CC: "In order to enter into a valid transaction, it is necessary to be of sound mind. But it is for those who seek annulment on that ground to prove the existence of a mental disorder at the time of the transaction."
Not relevant if the other party relied on any intention: the proof of mental disorder is enough to invalidate the contract
In English law, only if the other party knew that its counterpart was not able to appreciate the nature and effect of the transaction, the latter can decide not to be bound by it (Hart v O'Connor 1985)
In Dutch law, Art. 3:34 Bw states that in cases where the juridical act is disadvantageous for the mentally disturbed person, he is presumed to have acted under the influence of the mental disturbance
The other party can always invoke his reasonable reliance on basis of Art. 3:35 BW