Capacity

In contract law, "capacity" refers to a person's legal ability to enter into a binding agreement. This means that the individual must be of sufficient age, typically at least 18 years old, and possess sound mental ability to understand the contract's terms and consequences. Certain individuals, such as minors, mentally incapacitated persons, or those under the influence of drugs/alcohol, may lack the capacity to contract. If someone does not have the required capacity, they can often void the contract. Understanding capacity ensures that all parties are competent to make legal commitments.