Also known as: capacity to sue · sue and be sued · legal capacity
Written by attorneys · grounded in primary & secondary sources — see below
The legal qualification of a natural person or entity to participate as a plaintiff or defendant in judicial proceedings.
Charles Cunningham, recently placed under a limited financial conservatorship, signed a margin trading agreement while intoxicated at a reception. When the counterparty sought to enforce the deal, Cunningham through his conservator filed suit to void it. The court examined whether the conservatorship deprived him of capacity to incur even voidable duties, determining that the agreement remained unenforceable against him.
Cedar Creek Farms, an unincorporated entity, filed a contract action in federal court against a supplier. The supplier moved to dismiss for improper venue, arguing the farm lacked capacity to sue in its common name. The court applied the venue statute and held that because the farm possessed capacity to sue under state law and was subject to personal jurisdiction, venue was proper in the district of its principal place of business.
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The Chen Family Trust owned rural land that three co-trustees managed. One trustee alone signed a five-year ground lease with BrightSky Solar. When BrightSky sued the trust to enforce the lease after the other trustees objected, the court ruled no landlord-tenant relationship arose because the signing trustee lacked authority to bind the trust.
Cardinal Insurance, a limited liability company, brought a coverage action against a policyholder in state court. The defendant moved to dismiss, claiming the LLC could not sue in its own name. The court rejected the motion, confirming that the LLC possessed statutory capacity to sue and be sued independently of its members.
Coastal Shipping, a limited partnership, defended a personal-injury suit brought by an injured worker. The plaintiff argued the partnership lacked capacity to be sued in its own name. The court held that the partnership possessed statutory capacity to sue and be sued, allowing the action to proceed directly against the entity.
Crestview Holdings, a corporation, was named as defendant in a breach-of-contract action. It moved to dismiss on the ground that it lacked capacity to be sued. The court denied the motion, noting that every corporation possesses power to sue and be sued in its corporate name unless its articles provide otherwise.
A party without legal capacity cannot incur even voidable contractual duties. When capacity is absent, the resulting agreement is unenforceable, preventing either party from suing to enforce it or being sued successfully on it.
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Yes. Statutes grant limited liability companies and limited partnerships the capacity to sue and be sued in their own names, allowing them to initiate or defend actions without joining members or partners.
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An entity with capacity to sue and be sued in its common name is deemed to reside for venue purposes in any district where it is subject to personal jurisdiction as a defendant, or at its principal place of business as a plaintiff.
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A landlord-tenant relationship exists only if both parties have legal capacity or requisite authority to enter it. A signature by an unauthorized trustee or agent fails to create an enforceable tenancy, so neither party can sue or be sued on the purported lease.
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…candidly admits that the action against Piper and Hartzell was filed in the United States because its laws regarding liability, capacity to sue, and damages are more favorable to her position than are those of Scotland. Scottish law does not recognize strict liability in tort. Moreover, it permits wrongful-death actions only when…