ESSENTIAL ELEMENTS OF

A VALID CONTRACT

Dr Innocent Maja/Walter Makhuyana

 7. CONTRACTUAL CAPACITY
 This refers to the legal capability to form a
binding contract.
 Both parties must have the mental capacity to
understand the nature and consequences
(ramifications) of a contract.
 The rules on contractual capacity are designed
to protect people that have insufficient
understanding in the eyes of the law to protect
themselves in the marketplace
 The law recognizes two categories of legal
persons that potentially have contractual
capacity
 A. ARTIFICIAL PERSONS
 These are business entities (with distinct
identity and legal personality) recognized by law
for purposes of entering into contracts
 They have the legal capacity to enter into
binding contracts through human agents
1. Corporations – refer to registered Companies,
Private Business Corporations and statutory
corporations. Their contractual capacity is usually
found in the company documents (memorandum
and articles of association), the Companies Act or
an enabling statute.
2. Partnerships – the Partnership Deed details who can
contract on behalf of the partnership. As a general
rule, any partner can enter into a contract on behalf of
the partnership if the contract furthers the interests of
the partnership.
3. Trusts – In Wilsa v Mandaza and Others 2003 (1) ZLR
500 (H), the court held that a trust is not a legal person
and cannot institute legal proceedings. But individual
trustees can institute legal proceedings on behalf of
the trust.
4. Voluntary organisations (common law universitas) –
eg clubs, churches, co-operative societies, etc. Their
constitutions mention who can contract on behalf of
the organisation
5. The state – section 2 of the State Liabilities
Act (Chapter 8:14) affords the state the
capacity to contract as a natural person. The
state can enter into contracts through natural
persons provided for by the relevant statute.
6. Universities and parastatals – contractual
capacity is provided for in the enabling
statute as read with the State Liabilities Act.
 B. NATURAL PERSONS
Natural persons need to have reached the legal age of
majority (18) for them to have capacity to contract. The
following persons are disqualified from contracting:
1. Minors – a minor is a person below the age of 18. they do
not have capacity to contract unless they are assisted by a
guardian. Assistance means knowledge and lack of objection.
 When a major enters into a contract with a minor, the
major is bound and the minor is not. The contract is called
a limping contract.
 Mujaji v Mushoriwa - below 7 years, no capacity at all.
Guardian must enter on minor’s behalf. Above 7, they can
enter with assistance of a guardian.
An unassisted minor can be bound in the following
circumstances:
 If the minor is tacitly emancipated – no longer under
the control of parents and either earns his or her
own living or maintains a separate household or
both (Dickens v Daley)
 If the minor gets married – sections 20, 21 and 22 of
the Marriages Act allows a married minor to enter
into contracts without the assistance of a guardian.
 If the minor represents his or her age
 If a minor is unjustly enriched
 If the minor ratifies the contract upon reaching the
legal age of majority.
2. Insolvents – those who accrue more
liabilities than their assets can pay for. They
can only enter into contracts with the
assistance of a trustee.
3. Prodigals – declared by a court to be
incapable of managing their affairs due to a
propensity to squander. They can only contract
with the assistance of a curator.
4. Insane or mentally ill persons – they have no
capacity to contract because they lack mental
capacity to appreciate the nature ad
consequences of a contract.
5. Intoxicated persons – an intoxicated person has no
contractual capacity when they are intoxicated because
they lack the mental capacity to contract.
6. Married womed – their contractual capacity is
determined by the type of contract they enter into. In
Zimbabwe, marriages are either
a. In community of property – husband and wife have a
joint estate. The husband as administrator can enter
into a contract without wife’s consent. Wife cannot
enter into a contract without husband’s consent
except for basic necessities.
b. Out of community of property - parties husband and
wife own property separately. Wife can contract
without the consent of the husband.