Capacity to Contract

Capacity to contract refers to the legal ability of individuals or entities to enter into a binding agreement. To have this capacity, a person must be of a certain age (usually 18 or older), mentally competent, and not under the influence of substances or coercion. If someone lacks capacity—such as minors or individuals with mental incapacities—their contracts may be void or voidable. Essentially, capacity ensures that all parties involved fully understand and agree to the terms, promoting fairness and legal accountability in agreements.