CONTRACTUAL

CAPACITY
1.WHO HAS FULL CC?
2.WHAT LIMITS CC?
a)Age (minors)
b)Marriage
c)Insolvency; Mental Illness;
Intoxication.
3. MARRIED PERSONS
a)ICOP
b) OCOP with accrual
c) OCOP without accrual

Minors
1. Who are minors?
2. CC minors?
i. 0-7 = NO CC
ii. 7-18 = Limited

3. Effect contract with assistance?

= Bound unless inherently prejudicial

4. Effect contract without

assistance?
CL CPA
Limping
Voidable at option
minor (s 39 CPA)
Major bound BUT
Minors parents have election:
Ratify

Repudiate

Married persons
Types of marital property regimes (x2):
1) In community of property (all marriages
without ANC)
2) Out of community of property (with ANC)
i) excluding accrual
ii) including accrual
Accrual = gains made during marriage.
Default = ICOP: applicable ALL marriages
(including customary marriages and civil unions
not applicable religious marriages)
Two issues:
A)Property division on termination marriage
B)Contractual capacity of spouses during
marriage

ICOP
A) PROPERTY
Joint ownership assets + Joint liability debts!
On termination (death or divorce): 50/50 split,
excluding damages awarded one spouses for
non-financial loss; inheritance/donations
excluded from joint estate by testator/donor.
Insolvency: both spouses assets fall into
insolvent estate!!!
B) CONTRACTUAL CAPACITY
Both spouses have full CC iro joint estate.
BUT: Permission needed for some contracts
Types of permission: verbal, written, written +
2 witnesses. NB = s15 Matrimonial Property
Act!

ICOP
i. VERBAL
i.
ii.
iii.

Sell or pledge furniture or other effects common household

Receive any money, income, pension due to other spouse
by virtue profession, trade or business
Receive proceeds insurance policy or annuity ifo other
spouse

ii. WRITTEN
i.
ii.

Sell or pledge jewellery, coins, stamps, paintings or other

assets held mainly as investments
Sell, cede or pledge shares, stocks, debentures, insurance
policies *

iii. WRITTEN + 2 WITNESSES

i.
ii.
iii.
iv.

Sell/mortgage/grant servitude/other real right over

immovable property
Buy immovable property in instalments *
Buys goods on credit under National Credit Act *
Stand surety for third party *

EXCEPTIONS
a) No permission needed if * contract entered into by one
spouse in ordinary course trade, profession or occupation

EFFECT LACK OF CONSENT?

Contract VOID
Exception: S 15(9) MPA

ICOP
NB to remember
IF CONTRACT NOT LISTED IN S 15 MPA, NO
PERMISSION NEEDED!!!
EXAMPLES: is permission necessary for the
following?
a)Sell car?
b)Resign from job?
c)Enter into contract of employment?
d)Sell jewellery given as a present by mother?
e)Buy R10 000 couch on instalments from House n
Home?
f)Buy R20 000 flat-screen TV for cash?
g)Buy R100 000 car for cash?
h)Enter into a 2-year cellphone contract?
i)Buy air-tickets to fly to Thailand using credit card?

0COP
A) PROPERTY
NO joint estate. Assets and debts =
individual!
On termination (death or divorce):
i) OCOP without accrual

NO division

ii) OCOP with accrual

Division of accrual ONLY!

Accrual excludes inheritance, legacies, donations,
damages for non-financial loss.

B) CONTRACTUAL CAPACITY
Full CC iro OWN assets.
No CC over other spouses assets.

0COP
Calculating the accrual:
Calculate growth of each estate: spouse with less
growth entitled to half the difference in growth
respective estates

M
D

1 000 000
5 000 000
4 000 000

3 000 000
4 000 000
1 000 000

Difference in growth: 3 000 000

W entitled to the difference in growth:
= R 1 500 000

Mental Illness
Presumption: all persons presumed to be
sane (full mental capacity) until contrary
proven.
Onus on person alleging incapacity (i.e. on
person seeking to avoid the contract).
Exception: if person declared mentally ill by
Act then onus on person alleging capacity (i.e.
on person seeking to uphold the contract).
Whether have necessary mental capacity at
time contract concluded therefore a
question of fact in each individual case.
Lack capacity if incapable of properly
understanding the nature of the contract and
appreciating the rights and obligations
created by the contract. (i.e. full legal
implications of actions).
Effect of contract concluded by mentally ill
person: = VOID.

Insolvency and
Intoxication
Insolvency: A question of law (not of fact).
Not insolvent unless High Court has made an
order declaring you to be insolvent.
Contractual capacity then limited iro certain
contracts:
Insolvent may not enter into any contract
to dispose of any property in insolvent
estate.
May not enter into any contract which will
adversely affect insolvent estate, or trade
as general dealer or manufacturer, without
written consent trustee.
Effect of such a contract: voidable at
instance Trustee.

Intoxication: If so intoxicated that dont realise

entering into a contract at all or have no idea of
any of the terms of the contract, then contract
VOID.
But if merely so intoxicated that conclude
contract that normally wouldnt conclude,
or as a result more reckless or easily
influenced, contract valid.