Capacity to enter into a contract in german civil law

Table of contents

References

List of abbreviations

1. Introduction

2. Capacity to contract

3. Deficiencies to contract
3.1. Incapacity to enter a contract
3.2. Limited capacity to enter a contract
3.3. Partial capacity to enter a contract

4. Conclusion

ITM Checklist

References

Bisges, Marcel, Schlumpfbeeren für 3000 Euro - Rechtliche Aspekte von In-App-Ver- käufen an Kinder, NJW 2014, 183.

Boemke, Burkhard / Ulrici, Bernhard, BGB Allgemeiner Teil, 1. Aufl., Berlin 2009.

Brox, Hans / Walker, Wolf-Dietrich, Allgemeiner Teil des BGB, 42. Auflage, München 2018.

Meyer, Susanne, Gratisspiele im Internet und ihre minderjährigen Nutzer, NJW 2015, 3686.

Reich, Dietmar O. / Schmitz, Perter, Einführung in das Bürgerliche Recht, 3. Aufl., Wiesbaden 2000.

Rupp, Caroline S., Volljährigkeit, Vormundschaft und Flüchtlingseigenschaft, ZfPW 2018, 57.

Palandt, Bürgerliches Gesetzbuch. Kommentar, bearb. v. Bassenge, Peter/Brudermüller, Gerd/Ellenberger, Jürgen ua, Bd. 7 – Beck'sche Kurz-Kommentare, 77. Aufl., München 2018 (zitiert: Palandt/ Bearbeiter).

Prütting, Hanns/Wegen, Gerhard/Weinreich, Gerd, BGB, Kommentar, 6. Aufl., Mün- chen 2011 (zitiert: Bearbeiter in P/W/W).

Willems, Constantin, Influencer als Unternehmer, MMR 2018, 707.

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

Capacity to enter into a contract in german civil law

1. Introduction

The capacity to contract is a fundamental right that empowers a person to participate in everyday life. To protect certain groups of people from legal transaction that overreach and overexerts them, there a laws in the BGB that limit or deny their contracting capaci- ty. However, sometimes there are cases in which the deficiencies to contract seem to have more disadvantages than advantages for a person. That can be the case in surrogate businesses or if it is not practicable to get the consent of a parent. Especially when it comes to children who are acting anonymously in the internet, it will be challenging in the future for retailers to deal with them.¹ For example, on July 28 in 208, the AG Ber - lin-Mitte ruled in favour of a father whose daughter had bought a subscription for ring - tones without his consent. In this case, the provider "Jamba" was left empty-handed.² In the light of digitalisation it has become more and more usual to make subscription based contracts not only for hardware but for software as well. Software like photoshop or even office software can be licensed and subscription based. Since those kinds of contracts are not included in the pocket money section, it may become hard for retailers to directly contract with minors without asking for the consent of their parents that would have to reach them directly, which can be rather unpractical.

This assignment is going to answer the question under which circumstances persons are capable to enter into a contract in german civil law. First it is going to be explained what capacity to contract means and how it is handled within the BGB. The following main section discusses the deficiencies to contract for non adults and persons who suffer from a mental disturbance. In the end there will be given a conclusion.

2. Capacity to contract

The capacity to contract is defined as the ability to effectively carry out a legal transac- tion.³ The german civil code assumes that basically every person is capable of entering into a contract.⁴ Questions of capacity to contract are generally dealt with in sections 104 to 113 of the german civil code. These sections do not determine who has the capa - city to contract but who does not have full or no capacity. This makes legal transactions between parties easier to handle since they do not have to make sure, every time they want to enter a contract, if the other party of a transaction has the capacity to contract after all.⁵ Also the constraint to the capacity to contract serve the purpose of protecting those who are concerned by sections 104 ff.⁶ Therefore transactions that are made under the false assumption of full capacity to contract are void and cannot lead to a disadvan - tage for the party that has limited or no capacity to contract.⁷

While it has been quite easy to determine someones age by checking their ID card, it has become more and more difficult to establish the age in the light of the refugee crisis. More than 100,000 unaccompanied minor refugees reached Germany in the last few ye - ars. These refugees come from countries like Egypt and Libya, where one is considered as underage until the age of 21.⁸ Following german international privat law, those refu - gees are to be handled as minors (Art. 7 I sent. 1 EGBGB) and therefore do not have full capacity to enter into a contract under german civil law.

The BGB distinguishes four levels of contracting capacity: full ability, limited ability, partial ability and disability to contract. Next to the ability to contract there are nubility, testator’s capacity and liability in torts. While nubility and testator’s capacity are special forms of capacity to contract the liability in torts does not subsume under contracting capacity. ⁹ With regard to the scope limitation this assignment will only shed a light on the capacity to contract and leave out the legal framework of nubility and testator’s ca- pacity.

3. Deficiencies to contract

Section 104 of the german civil code makes sure that only persons that are able to over- look the legal consequences of their own behaviour have the full capacity to enter into a contract.¹⁰ An exclusion of the free exercise of will exists when a person is unable to form his will freely and unaffected by the present mental disturbance and act according to correctly gained insights.¹¹ The reasonable formation of will requires a certain mini - mum of judgmental power. If a person does not have this power of judgment, it is not justified to bind this person to his behaviour. Therefore the incapacity or limited capaci- ty to contract is defined by deficiencies regarding age and mental condition.¹² Anyone who is incapable to contract has no legal power to make declarations of intent effective or to make legal transactions independently, for example to conclude or terminate contracts. He needs a legal representative.

3.1. Incapacity to enter a contract

3.1.1. Conditions of incapacity to contract

A person is incapable of contracting if they are not yet seven years old (§ 104 no. 1 BGB). Also incapable to contract is a person who is in a state of pathological mental disturbance, which prevents the free exercise of will, unless the state is a temporary one (§ 104 no. 2 BGB). People who are not in a permanent state of pathological mental dis - turbance, as in section 104 no. 2 BGB described, but have clear moments now and then are nonetheless considered as incapable of contracting.¹³ A declaration of intent that is given in a clear moment (lucidum invervallum) is valid.¹⁴ According to section 104 no. 2 BGB incapacity is given if the free exercise of will is not possible. This is not the case if a person is just easy to be influenced¹⁵ or unable to oversee the consequences.¹⁶

If a temporary mental disturbance is present the person concerned cannot be seen as in- capable of contracting by the terms of section 104 no. 2 BGB. But the declaration of intent that is made in a state of unconsciousness or temporary mental disturbance is void according to section 105 II BGB.

A special form is the partial incapacity to contract. This means that somebody is not ca- pable to contract in some cases but has full or limited capacity in other parts.¹⁷ Partial incapacity can be given if someone who suffers from pathological jealousy has to deal with a divorce.¹⁸ In contrast, the limited impairment for contracting as described for par - tial incapacity does not depend on the complexity or level or difficulty (so-called relati- ve ability to contract).¹⁹ This means that a considerably old person who is still capable of dealing with contract of everyday life like buying groceries is also capable of closing a contract for highly complicated financial packages.

3.1.2. Consequences of incapacity to contract

The declaration of intent of a person incapable of contracting is void (§ 105 II BGB). Persons who are incapable of contracting may act through a legal guardian if they are mentally ill (§ 1902 BGB) or their parents if they are under age (§ 1629 BGB). Even though children under the age of 7 are incapable of contracting, they can act as messen- gers in a legal transaction, so they only convey a declaration of intent from their legal representative in everyday business. The latter may be the parent or a legal guardian.²⁰ A representative (see §§ 164 ff BGB) may also close a contract for their ward to buy so - mething on their behalf and later devolve the object to their ward (§ 929 BGB). If a re- presentative acts on behalf of a ward all legal consequences affect this ward (§ 164 I sent. 1 BGB). The contract becomes effective as if the representative had himself closed it.²¹

Also void is a declaration of intent that is made in a state of unconsciousness or tem - porary mental disturbance (§ 105 II BGB). This state of unconsciousness or temporary mental disturbance does not make a person generally incapable to contract.²² Declarati - ons of will that reach a person who is incapable to enter a contract according to section 104 BGB are void as long as they do not reach the legal representative (§ 131 BGB). However, a declaration of intent delivered to a person that is unable to contract accor - ding to section 105 II BGB can be valid since this person does not have a legal repre - sentative. If someone is in a drunken stupor and receives a letter of intent this declarati- on is valid while a verbal declaration does not reach this person and ist therefore void. ²³ In this case the drunken person can be treated as absent.²⁴

3.1.3. Exception of section 105a BGB

According to section 105a BGB, a person of full age who is incapable of contracting can enter into an everyday transaction that can be effected with funds of low value. The contract he enters into is regarded as effective with regard to performance and conside- ration, as soon as performance has been effected and consideration rendered.²⁵ This does not apply in the case of considerable danger to the person or the property of the person incapable of contracting. This could be the case if an alcoholic who is incapable to contract according to section 104 no. 2 BGB tries to buy alcohol or if the person in - capable to contract buys five coats if just one is necessary.²⁶

Because of section 105 I BGB, a person who is incapable to contract cannot make an effective declaration of intent. This prevents contracts with these persons from being concluded. Section 105a BGB does not change this. However, in order to enable men - tally handicapped persons to participate appropriately in private legal transactions, a contract concluded by persons of legal age who are unable to contract is deemed to be effective if it contains a transaction of daily life.²⁷ This means a contract of a mentally disabled adult with another contractor is treated as valid, even though the mentally disa- bled is not capable of declaring an intent, as long as performance and return are in an appropriate ratio.²⁸

3.2. Limited capacity to enter a contract

3.2.1. Conditions of limited capacity to contract

A minor who has reached the age of seven has limited capacity to contract according to section 106 BGB. The regulations for limited capacity can be found in sections 107 to 113 BGB. A person who is already of age but has consent reservation under section 1903 BGB ordered by a court, is treated similar like persons with limited capacity.²⁹ For both it is possible to either let someone else be there legal representative who contracts on their behalf or undertake business on their own.

3.2.2. Consequences of limited capacity to contract

If persons with limited capacity under section 106 BGB or with consent reservation un - der section 1903 BGB decide to do contract on their own, there are two conditions atta - ched: First, they may enter into legal transactions which merely give them a legal ad- vantage (§§ 107, 1903 II BGB). Second, all other legal transactions require the consent of the legal representative in order to be effective. This participation can either take place through prior consent (§ 183 BGB) or through subsequent approval (§ 184 I BGB).³⁰ In principle, declarations of intent by a person with limited legal capacity are invalid if they are made without the prior consent of the legal representatives (§§ 106, 107 BGB). From this principle there are according to sections 107 to 113 BGB excepti - ons, if the person with limited capacity to contract does not suffer any legal disadvanta - ge through the legal transaction or the legal representatives subsequently approve the transaction (§ 184 BGB).³¹

When contracting with a person who has limited capacity to contract it is possible to withdraw the contract (§ 109 I sent. 1 BGB). The withdrawal can be declared to the per - son with limited contracting capacity himself and does not have to reach the representa- tive (§ 109 I sent. 2 BGB). The contract cannot be withdrawn if one party has known that the other party is underage and if he knows that there is no ratification from the re - presentative (§ 108 II BGB).

3.2.3. Exceptions of § 107 BGB

Following section 107 BGB, only legal transactions that have a legal advantage can happen without the consent of a representative. This means that also a transaction that is in the final outcome advantageous needs consent if there are disadvantages attached to the transaction. ³² Mutual contracts that require performance from both parties are by nature legally disadvantageous.³³ A legal transaction that is neutral does not need con - sent from the legal representative.³⁴ A general ratification for certain number of invaria - ble transactions may be given if the general ratification is limited to a certain area.³⁵ In contrast, an indefinite general ratification is not effective.³⁶ The limited general ratifica - tion brings up ambiguity in times of digitalisation. Giving a minor a smartphone is not to be regarded as a general limited ratification to make pricey phone calls in order to purchase something.³⁷ The general limited ratification for a certain area does not extend to In-App purchases as well: If a minor uses the App Store account with the consent of his or her parents, the In-App purchase is not already effective on the basis of this con - sent, because the consent within the meaning of section 107 BGB must be specified to the extent that it relates to a specific contract and a specific contractual partner.³⁸

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¹ Vgl. Meyer NJW 2015, 3686.

² AG Berlin-Mitte Urt. v. 28.07.2008 – 12 C 52/08, MMR 2008, 696.

³ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §12 Rn.

⁴ Palandt/ Ellenberger, Einf. v § 104 Rn. 2.

⁵ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §12 Rn. 1.

⁶ BGH Urt. v. 12.10.1976 – VI ZR172/75, NJW 1977, 622.

⁷ Palandt/ Ellenberger, Einf. v § 104 Rn. 3.

⁸ Vgl. Rupp ZfPW, 2018, 57.

⁹ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §12 Rn. 3.

¹⁰ Palandt/ Ellenberger, Einf. v § 104 Rn. 3.

¹¹ BGH Urt. v. 05.12.1995 – XI ZR 70/95, NJW 1996, 918-919.

¹² Boemke/Ulrici, BGB Allgemeiner Teil, Aufl. 1 2009, § 9 Rn. 2.

¹³ Palandt/ Ellenberger, Einf. v § 104 Rn. 4.

¹⁴ BGH Urt. v. 12.12.1952 – V ZR 46/52.

¹⁵ Palandt/ Ellenberger, § 104 Rn. 5.

¹⁶ BGH Urt. v. 19.10.1960 – V ZR 103/59, NJW 1961, 261.

¹⁷ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §12 Rn. 7.

¹⁸ BGH Urt. v. 24.09.1955 – IV ZR 162/54, BGHZ 18, 184.

¹⁹ BGH Urt. v. 14.07.1953 – V ZR 97/52, NJW 1953, 1342.

²⁰ Reich/Schmitz, Einführung in das Bürgerliche Recht, Aufl. 3 2000, S. 33.

²¹ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §24 Rn. 18.

²² Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §12 Rn. 11.

²³ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §7 Rn. 27.

²⁴ BGH Urt. v. 06.10.1970 – 5 StR 199/70, BGHSt 23, 331 - 336 Rn. 7.

²⁵ Völzmann-Stickelbrock in P/W/W, 6. Aufl. 2011, §105a Rn. 3.

²⁶ Palandt/ Ellenberger, § 105a Rn. 5.

²⁷ Völzmann-Stickelbrock in P/W/W, 6. Aufl. 2011, §105a Rn. 1.

²⁸ Palandt/ Ellenberger, § 105a Rn. 3.

²⁹ Palandt/ Ellenberger, § 106 Rn. 1.

³⁰ Brox/Walker, Allgemeiner Teil des BGB, 42. Aufl. 2018, §12 Rn. 24.

³¹ Palandt/ Ellenberger, § 106 Rn. 2.

³² BGH Urt. v. 25.11.2004 – V ZB 13/04, BGHZ 161, 170.

³³ Boemke/Ulrici, BGB Allgemeiner Teil, Aufl. 1 2009, § 9 Rn. 29.

³⁴ Palandt/Ellenberger, § 107 Rn. 7.

³⁵ BGH Urt. v. 12.10.1976 – VI ZR 172/75, NJW 1977, 622.

³⁶ Ibid.

³⁷ AG Berlin-Mitte Urt. v. 28.07.2008 – 12 C 52/08, MMR 2008, 696.

³⁸ Bisges NJW 2014, 183.