Capacity (law)
The capacity of both natural and legal persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will. Capacity is an aspect of status and both are defined by a person's personal law:
- for natural persons, the law of domicile or lex domicilii in common law jurisdictions, and either the law of nationality or lex patriae, or of habitual residence in civil law states;
- for legal persons, the law of the place of incorporation, the lex incorporationis for companies while other forms of business entity derive their capacity either from the law of the place in which they were formed or the laws of the states in which they establish a presence for trading purposes depending on the nature of the entity and the transactions entered into.
When the law limits or bars a person from engaging in specified activities, any agreements or contracts to do so are either voidable or void for incapacity. Sometimes such legal incapacity is referred to as incompetence. For comparison, see Competence (law).
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Famous quotes containing the word capacity:
“Rice and peas fit into that category of dishes where two ordinary foods, combined together, ignite a pleasure far beyond the capacity of either of its parts alone. Like rhubarb and strawberries, apple pie and cheese, roast pork and sage, the two tastes and textures meld together into the sort of subtle transcendental oneness that we once fantasized would be our experience when we finally found the ideal mate.”
—John Thorne, U.S. cookbook writer. Simple Cooking, “Rice and Peas: A Preface with Recipes,” Viking Penguin (1987)