Definition and purpose of legal capacity In a legal context, legal capacity describes the ability of a natural person to carry out legal transactions independently and effectively. This capacity is a prerequisite for declarations of intent, such as contracts, to be legally effective. The purpose of the regulations on legal capacity is to protect persons who, due to their age or mental condition, are not able to fully comprehend the consequences of their actions. The German Civil Code (BGB) therefore distinguishes between different levels of legal capacity in order to appropriately classify and protect the legal transactions of individuals.

Legal incapacity (Sections 104, 105 BGB) Pursuant to Section 104 BGB, children under the age of seven and persons who are permanently unable to form a free will due to mental illness or mental impairment are legally incapable. Legal transactions carried out by legally incapable persons are void in accordance with Section 105 BGB, as these persons lack the necessary capacity of understanding to make effective declarations of intent. Persons lacking legal capacity are therefore fully represented by their legal representatives (usually parents or court-appointed guardians).

Limited legal capacity (Sections 106 et seq. BGB) Persons between the ages of seven and seventeen have limited legal capacity (Section 106 BGB). In principle, they can effectively enter into legal transactions, but generally require the consent of their legal representatives to do so. This consent can either be given in advance as approval or subsequently as authorization. Without consent, a legal transaction is initially suspended in accordance with Section 108 BGB and only becomes effective with subsequent approval. However, certain legal transactions are also effective without consent, for example if they merely provide the minor with a legal advantage (Section 107 BGB) or constitute so-called pocket money transactions in accordance with Section 110 BGB, in which the minor performs services with funds expressly left to their free disposal.

Full legal capacity (Section 2 BGB) Full legal capacity arises on reaching the age of 18. From this point onwards, natural persons can enter into legal transactions without restriction as long as there are no judicial restrictions. Adults are generally considered capable of fully grasping the legal implications of their declarations and acting accordingly on their own responsibility. Full legal capacity thus forms the legal basis for unrestricted participation in legal transactions.

Restriction of legal capacity in the case of guardianship (Section 1903 BGB) In the case of adults, legal capacity can be restricted by court order of a reservation of consent in accordance with Section 1903 BGB if this is necessary to protect the person concerned. The person is then legally treated in a similar way to a minor with regard to certain legal transactions and requires the consent of a court-appointed guardian. The aim of this regulation is to protect people who would be at risk if they were able to participate in legal transactions without restriction due to an impairment of their decision-making capacity or capacity of understanding.

Legal persons, unlike natural persons, do not have legal capacity of their own. Instead, they act through their legal or statutory bodies, such as managing directors, board members or authorized representatives. This representation takes place in accordance with the provisions on proxy representation (Section 164 BGB by analogy), whereby the declarations of intent made by the executive bodies are directly legally binding for the legal entity.

Legal consequences of a lack of legal capacity A lack of legal capacity has significant legal consequences: In principle, legally incompetent persons cannot enter into effective legal transactions; their declarations of intent are null and void. In the case of persons with limited legal capacity, validity depends on the consent of their legal representatives. Without consent or approval, legal transactions remain pending and ineffective (Section 108 BGB). If legal transactions have nevertheless been carried out, a reversal is required via the law of enrichment (Sections 812 et seq. BGB).

Conclusion on the importance of legal capacity Overall, the regulation of legal capacity in civil law serves to adapt the freedom of action of persons appropriately to their capacity for insight and personal development. The distinction between different levels of legal capacity protects minors and impaired persons in particular from legal disadvantages, while at the same time creating clear and reliable rules for the effectiveness of legal transactions in everyday life. This differentiated legal structure contributes significantly to legal certainty and the protection of those involved in legal transactions.