Capacity and Capability in European Contract Law

Abstract

So far, the concept of legal capacity is absent in the acquis communautaire on contract law. This article argues that a common frame of reference and an optional European code of contracts cannot do without rules on legal capacity. In the national contract laws of the Member States the main aim of the invalidity of contracts for incapacity has been the protection of persons against the consequences of a misjudgement of their own interests. This raises the question why the law should only protect persons who belong to a limited number of categories who are presumed not to be able to take proper care of their own interests. This article argues that under European contract law a person who has concluded a contract which is actually (extremely) unbalanced deserves equal protection. Such a fair price rule would contribute to substantive freedom of contract as it would facilitate access to the market. Finally, this article questions whether European contracts should be enforceable if they contribute to severely undermining the capabilities of other people (e.g., child workers in sweatshops) to choose the lives they have reason to value.

JEL Classification: K12