1. Natural Capacity Case Study

2. Case Presentation  Mary and her two sons are owners of a house in the countryside and offer John to buy it.  John refuses to deal with Alfa, the real estate agency entrusted by the Sellers, which offers the same house.  Sellers propose to wait until the end of the contract with Alfa.  John starts all the inspections and checks of the house that are necessary.  The house suits John’s needs even though it requires some renovation.

3. March 2005  Mary and John meet and decide upon to price of the house, which is the same as the one offered by the real estate agancy Alfa (270.000€), and the agree that John will start the renovation immediatly. January 2005  Mary and John sign a preliminary contract in front of a public notary. The contract states that John will carry out a 20% down payment on the price of the house.  The parties then agree on signing the final deed in the following months.  In the subsequent months Mary and her sons ask for another advance payment that will be deducted from the final price.

4. June 2005  John discovers that there is a mortgage registered on the house and after deleting it, they agree to sign the deed in August. August 2005  Sellers and Buyers sign the final sale contract in front of the same public notary.  Mary isn’t there, but her sons ensure everything is fine and one of them represents Mary through a power of attorney she signed the day before in front of the same public notary.  After the sale John moves in with his family and spends 200.000 Euros in renovation.

5. August 2007  John is summoned in front of the Tribunal of Rome by Mary, who asks for annulment of all contracts entered with him and the consequent restitution of the house.  Mary claims she suffered from a «bipolar disturb of personality» while making the contracts, so she wasn’t aware of what se was doing.

6. Mary’s proves  Mary shows she made a summer trip to Puerto Escondido without informing anyone, just before releasing the said power of attorney.  There are also medical records about his health conditions in the relevant period of time (between January and August 2005) showing she went to different hospital several times (and in Puerto Escondido too).

7. Mary’s Incapacity

8. Natural Incapacity The first question that came up from this case is: how is natural incapacity defined? Natural incapacity is the condition in which a person who has not being declared deprived (interdetto) faces a state of inability to act due to any plausible cause, even a transitory one, in the moment of making a juridical act (negozio giuridico

9. Main Questions  Can the contract be annulled after two years of validity?  Was John in bad faith?  What if Mary had a moment of lucidity while contracting with John?  What is the role of the two sons?  Are they responsible for the decision of their mother?  Can we consider them as tutors?

10. From the Civil Code

11. Art. 1425  Incapacità delle parti  Il contratto è annullabile se una delle parti era legalmente incapace di contrattare.  E' parimenti annullabile, quando ricorrono le condizioni stabilite dall'art. 428, il contratto stipulato da persona incapace d'intendere o di volere.

12. Art. 428 Gli atti compiuti da persona che, sebbene non interdetta, si provi essere stata per qualsiasi causa, anche transitoria, incapace d'intendere o di volere al momento in cui gli atti sono stati compiuti, possono essere annullati su istanza della persona medesima o dei suoi eredi o aventi causa, se ne risulta un grave pregiudizio all'autore (1425 e seguenti). L'annullamento dei contratti non può essere pronunziato se non quando, per il pregiudizio che sia derivato o possa derivare alla persona incapace d'intendere o di volere o per la qualità del contratto o altrimenti, risulta la malafede dell'altro contraente (1425). L'azione si prescrive nel termine di cinque anni dal giorno in cui l'atto o il contratto è stato compiuto (2953). Resta salva ogni diversa disposizione di legge (120, 591, 775,1195; 130).

13. Conclusion

14. Annulment of the contract  Mary asked for the annulment of the contract after 2 years from the signature  Art. 428 states that the time limit for the request is 5 years from the sign  The request of Mary is acceptable

15. About John  John does not appear to be in bad faith for two reasons:  He didn’t know about Mary’s mental disorder while contracting with her  John had the possibility to deal with the estate agency for the same price offered by Mary, but he decided to get directly to the Sellers also because she insisted with John to seal the deal without the intervention of the agency

16. Mary’s desease  We are not able to determine if Mary had some moments of consciousness during the dealing and if the pathology was so serious to bar her from understanding what she were doing  If a mental illness of this kind were proved by medical records we could not consider her actions voluntary.  In this case we must consider her as incapable of acting

17. The two sons  The two sons are not tutors because they weren’t nominated by a judge under a deprivation procedure.  As co-owners of the house, they constitute the 66.6% of the property, but when it comes to the validity of the act majorities do not count as all sellers have to be capable to act.  This is true also if they were perfectly capable to reason and made independent decisions

18. So…  The contract should not be annulled for Mary’s incapacity  Assuming the opposite she would still not win the law suit as John could not be considered in bad faith thus the conditions for annulment outlined in Art. 428 c.c. are not met

20. Ercole Belloni Mathias Mair Arnaldo Esposito Luca Pavoloni Federico Zugaro Federico Vinella