Contract Theory: The performance of an obligation is, by its legal nature, a contract. The practical consequence of this view is that the person performing the obligation must possess contractual capacity. As a general rule, they must be fully competent. A person who lacks full capacity cannot perform the obligation.
2- Theory of Material Act: Performance is, by its nature, a material act. Since there is no contract or legal transaction involved, the person need not possess the capacity to enter into a contract or full legal capacity.
3- Limited Contract Theory:. This is a conciliatory theory and the dominant theory in legal doctrine. In this theory, a distinction is made when explaining the legal nature of performance. Accordingly, if the parties’ agreement—that is, a legal transaction—is required for the fulfillment of the obligation, it constitutes a contract in terms of its nature of performance. Consequently, according to this theory, the person performing the obligation must possess full legal capacity. This does not create a change in the ownership of rights. Dispositions must be made after the contract is signed.