Final answer:
In agency law, both principals and agents must have the legal capacity, which means being of a certain age, usually 18 or over, and having a sound mind, to enter into contracts and be held responsible for their actions.
Step-by-step explanation:
To address the question, can anybody be a principle or agent or do they have to have capacity, it's important to understand the legal concepts of principal, agent, and capacity within the context of agency law.
In agency law, a principal is someone who authorizes an agent to act on their behalf, while an agent is the one who performs actions for the principal. However, both parties must have the legal capacity to do so. Legal capacity means the ability of an individual to enter into binding contracts and involves being of a certain age (usually 18 or older) and having a sound mind.
Individuals such as minors or those not mentally competent, due to reasons such as brain malfunctions or severe illnesses, lack the capacity to enter into contracts and, therefore, cannot become principals or agents in a legal sense.
This concept is fundamental in ensuring that the parties involved can ultimately be held responsible for their actions, for both ethical reasons and the protection of the interests of all involved.