Chapter III. Capacity of Parties

By the law of nature, all persons who have the full use of reason are capable of entering into contracts. On the other hand, children who have not yet attained the full use of reason, persons of unsound mind, and those who are drunk, cannot make valid contracts. We must, however, take into account the provisions of positive law which affect contractual capacity.

Religious who are professed to solemn vows, and are consequently incapable of holding property personally, cannot personally acquire property rights or liabilities under contract. Religious who are under simple vows are capable of holding property, and they can make valid contracts with reference to it; but they do not act lawfully without the permission of their superiors. In other matters, also, religious are dependent on the will of their superiors, and cannot lawfully undertake contractual obligations without their permission, If they do so, the contracts may be avoided by the superior, except as regards the acquired rights of third parties (Can. 536).

A married woman is now, by the Married Women’s Property Acts, 1882 and 1893, in the same position as a single woman as regards the acquisition and disposal of property, and the acquisition of rights and liabilities in contracts. Still, she is not personally liable in respect of contract nor for fraud committed in connection with contract. Her liability can only be enforced against her property. She cannot be made a bankrupt unless she is carrying on a trade apart from her husband.¹

¹ Digest of English Civil Law, n. 71.

A minor can enter into a binding contract which is for his advantage, as, for example, an apprenticeship; he can also make a valid contract to pay a reasonable price for necessaries, or for goods and services which are suitable to his position and which are actually required for his reasonable comfort. Other contracts entered into by minors are void in law and voidable in conscience, and no ratification of them after full age has been attained is enforceable, whether there be a new consideration for them or not. Of course, a minor cannot abuse the privilege which the law gives him in order to cheat and defraud others; if he has obtained a benefit even by contracts which are void by English law, he must pay a just price for it, and even English law will not enable him to recover money paid by him under such contracts if he has received benefit under them.

Convicts under sentence of death, or undergoing penal servitude for crime committed, have no legal capacity, and cannot enter into a contract which English law will recognize. Any property belonging to such a convict is administered in accordance with the provisions of the Forfeiture Act, 1870, by an administrator appointed by the court.

The unilateral acts of a person of unsound mind are by English law void, unless they were done during a lucid interval.

His contracts other than marriage are valid, unless it can be shown that the other party to the transaction was aware of the unsoundness of mind. In that case they are voidable at the option of the person of unsound mind or his representatives. The same rules hold good of the contracts of drunkards in English law.

Corporations or artificial persons are per se capable of entering into contracts through their agents in much the same way as natural persons. Those, however, that are created under the authority of English law by statute, or are formed under general statutes such as the Companies Acts, for definite purposes, are held incapable of binding themselves for objects clearly beyond those purposes as declared in the company’s constitution,” ¹ Encyclopedia of Laws, s.v. Contract.

¹ Digest of English Civil Law, n. 54.