Before dealing with private law, it is first necessary to clarify who is the bearer of rights and obligations and what objects can be the subject of these rights. The focus here is on the distinction between legal subjects and legal objects. Legal subjects are persons to whom the legal system grants rights and imposes obligations. Only they can acquire property, conclude contracts, or be held liable for actions. Legal objects, on the other hand, are the subjects of legal relationships, such as things or rights that can be disposed of. They are not capable of acting themselves and cannot hold rights or obligations.
Legal capacity
Every human being from birth to death, regardless of age, gender, nationality, or other personal characteristics, is legally competent (a person or legal subject) and thus potentially the bearer of rights and obligations. This means that every human being can own property, conclude contracts, or become an heir. Legal capacity is universal, i.e., in principle, every person can acquire various rights and conclude contracts.
In addition, legal entities such as associations, companies, or foundations also have legal capacity if they have been established by law or official recognition. The legal capacity of legal entities is established either directly by law or by an official or court decision. Similarly, the legal system also recognizes state legal entities, such as the Republic of Austria, the federal states, and the municipalities, as independent entities.
Capacity to act
Capacity to act describes a person's ability to bring about legal effects through their own actions. While legal capacity determines who can be the bearer of rights and obligations, capacity to act defines whether a person can independently conclude contracts, enter into obligations, or be liable for damages. It is thus a central concept for regulating the legal autonomy of persons.
Legal capacity is a sub-area of capacity to act and describes the ability to independently make legally effective declarations of intent. It is generally granted upon reaching the age of 18. In the case of children, the scope of legal capacity is determined by law based on age. The legal capacity of persons who are unable to manage their own affairs, e.g. due to illness, may also be restricted or completely waived.
From the age of 14, people in Austria are generally capable of committing crimes, which means they can be held liable for damage they cause. Regardless of this, they can also be held criminally responsible for criminal acts. The decisive factor is whether the person was able to recognize the wrongfulness of their actions at the time they were committed and to act accordingly.
Representation
Representation enables one person (a human being) to perform legally effective acts on behalf of another person. This is necessary in the first instance if someone is unable to act on their own behalf – for example, a minor or a legal entity (such as an association or a limited liability company) – but also if someone deliberately sends a representative, e.g. because the representative is a better negotiator. Through representation, the representative can make declarations of intent on behalf of the represented person (e.g., conclude contracts).
In the case of legal representation, the law determines who may or must act on behalf of another person. Minors have no or only limited legal capacity, which is why their parents usually represent their legal interests, for example, when concluding contracts or accepting an inheritance.
Legal entities such as companies or associations have legal capacity but cannot act on their own behalf. This task is performed by their organs, for example managing directors or board members, who conclude contracts on behalf of the organization and represent its interests externally. If, for example, a limited liability company (GmbH) wants to buy a car, the managing director signs the contract. This makes the GmbH legally bound and the owner of the vehicle.
Even if a person could act legally on their own behalf, this is not always advantageous. Through voluntary representation, they can authorize someone else to conduct legal transactions on their behalf. This representation is based on a voluntary decision and is carried out by granting a power of attorney. A power of attorney is granted by a declaration of intent, i.e., the principal must be capable of acting.
Even if the representative conducts the negotiations and concludes the contract, the legal effects do not apply to them, but to the person they are representing. The representative does not become a contractual partner themselves, but merely mediates the legal conclusion for the person they are representing. For this to happen, the person being represented must allow the representative to act on their behalf, i.e., grant them power of attorney. In addition, it is usually also necessary for the contractual partner to be able to recognize with whom they are actually concluding a contract.
The scope of a power of attorney can be flexibly designed and limited to specific activities or legal transactions. For example, a person can appoint someone they trust to handle legal matters on their behalf without having to be present or active themselves.
Even though many court proceedings could in principle be conducted independently, in practice it is often advisable to consult a lawyer (power of attorney) in order to avoid mistakes in the conduct of the proceedings. In some courts—such as higher courts—representation by a lawyer is even required by law, i.e., the party is not allowed to act on its own behalf even if it is actually capable of doing so. In such cases, legal representation is mandatory in order to be able to act effectively and protect one's own rights.
Things/Legal Objects
In Austrian private law, the term “thing” or “legal object” refers to everything over which persons can exercise rights or which can belong to a person. Legal objects are the focus of numerous private law regulations, as they form the subject matter of legal transactions and claims. The law distinguishes primarily between tangible and intangible objects, as well as other categories that define the scope of application.
Tangible objects are items that are physically perceptible and controllable. They include everything that is tangible and can be subjected to the control of a legal entity. This includes movable and immovable objects (real estate). Animals, which are not considered property (or persons) under Austrian law, are also treated as property by the law, although there are numerous exceptions for the protection of animals.
Intangible property is immaterial goods that are not physically tangible but have legal and economic value. In some legal systems (e.g., the German legal system), they are also referred to as “rights.” They play a central role in the modern economy in particular, as many assets do not exist in physical form. Typical examples of intangible property are claims, i.e., claims for payment or performance against a debtor, company shares associated with property rights and membership rights such as profit sharing or voting rights, and intellectual property rights such as copyrights, trademarks, and patents, which protect intellectual property and legally secure its use and exploitation.
A key criterion for the legal classification of property is its controllability. Only goods that can be controlled by humans, either physically or legally, are suitable as objects of rights. In the case of tangible property, this controllability arises directly from the possibility of taking possession of and controlling it. In the case of intangible property, controllability is mediated by law: Claims can be transferred by assignment and enforced in court, for example, while intellectual property rights can be controlled by licenses or prohibitions. In this case, the law creates the structures to make intangible goods tradable and assignable in a similar way to physical objects.
A distinction must be made between private property rights and sovereign rights and public law powers. These are powers that belong exclusively to the state and are not considered property in the civil law sense. Examples of sovereign rights are legislative power, jurisdiction, and tax sovereignty. Public law powers include, for example, the right to drive a motor vehicle on public roads, the right to operate a business, and citizenship. Such rights are non-transferable, non-negotiable, and belong to the individual entitled to them. They serve the exercise of state functions and cannot be the subject of private property rights.
Finally, it should be noted that human beings cannot be the subject of property rights. Ownership of persons is incompatible with human dignity and fundamental rights and is legally excluded. People are bearers of rights, not objects of rights. Legal relationships that are linked to persons do not establish dominion in the sense of ownership, but are based on special legal foundations, such as parental custody or the state's duty of care. Modern law makes a clear distinction between things that can be legally controlled and persons who are themselves legal entities.