Rationalizing and Harmonization of BC Common-Law Tests of Capacity

It is basic law that mental disability or illness does not, in and of itself, leave a person incapable under the law to carry out transactions, enter into relationships, or manage his or her affairs. The law’s focus is on the degree of mental disability or illness. If a person’s mental illness or disability exceeds in degree a legal threshold, then that person will be considered incapable in the eyes of the law. This legal threshold is commonly called a test of capacity.

There is no single, global test of capacity. Instead, the law has developed many different tests of capacity, each geared to specific types of transactions or relationships. Over the past 20 years, British Columbian and Canadian law has seen significant development of legislation relating to mental capacity, which has yielded modern and sophisticated rules on when a person is mentally competent to perform certain tasks or enter into certain transactions. But many areas of the law continue to rely on older common-law tests of capacity, which hold sway in contract law, wills-and-estates law, and family law, among other areas. This project studied selected common-law tests of capacity, determined where the current law had shortcomings that require modernization or harmonization, and recommended legislative reforms to address those shortcomings.

This project was generously funded by the Law Foundation of British Columbia and the Notary Foundation of British Columbia.

Keywords: legal capacity, test of capacity, incapacity, incompetence, contracts, wills and estates, gifts, marriage, family law