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THE validity of contracts is not governed in Germany by a unitary rule. With respect to capacity and formalities the Introductory Law to the Civil Code lays down general provisions which are applicable to contracts. Article 7, paragraph 1, of this law provides that the capacity to do juristic acts shall be governed by the national law. The capacity to contract is to be determined, therefore, with reference to the national law of each of the contracting parties. The rule is laid down generally and controls irrespective of whether the party in question is a German or a foreigner. The national law determines whether a person is a minor and whether a married woman can contract without authorization from her husband. It determines also the method, if any, by which the capacity of a person under disability can be supplemented, as, for example, by authorization from his legal representative or a court of guardianship. The national law applies likewise to disabilities resulting from judicial action, such as the appointment of a guardian for a spendthrift; for, contrary to Anglo-American law, the effect of such an appointment is ubiquitous in its operation in continental countries. This assumes, of course, that the appointment of the guardian was validly made in accordance with the German principles of the conflict of laws.

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