Contractual Capacity

As Property practitioners, it is of paramount importance to ascertain the party’s contractual capacity prior on entering into a contract. This is just a brief highlight to shed some light on the topic.

The contractual capacity of natural persons in an immovable property sale agreement:

• Unmarried = Full capacity

• Married in community of property = Limited capacity

• Married out of community of property = Full capacity

• Married in customary law = Limited capacity

• Married in customary law with an antenuptial contract = Full capacity

• Minors (Under seven years) = No capacity

• Minors (Seven to Eighteen years) = Restricted capacity- requires parents or a legal guardian’s assistance + consent from the Master of the high court OR the High court.

The contractual capacity of juristic persons in an immovable property sale agreement:

• Company = Resolution from all the company directors prior to signing the contract.

• Close corporation = Resolution from all the members of the close corporation prior to signing the contract.

• Trust = Resolution by the trustees is required prior to signing the contract.

References:

• The matrimonial property act 88 of 1984

• The recognition of customary marriages acts 120 of 1998

• The companies act 71 of 2008

• Law guide: South African contract law