Contractual Capacity Definition

Contractual capacity is the legal ability of an individual to enter into a contract. An individual must have the mental capacity to understand the terms of the contract, as well as the ability to make a free and informed decision about whether or not to enter into it.

In order to be legally bound by a contract, an individual must have the capacity to understand its terms and conditions. This includes having a basic understanding of what they are agreeing to and being able to make a free and informed decision about whether or not to enter into the contract. If an individual does not have this capacity, then the contract is voidable and can be set aside by a court.

There are a number of factors that can affect an individual’s contractual capacity, including their age, mental state, and whether they are under the influence of drugs or alcohol. It is important to note that even if an individual does not have the capacity to enter into a contract at the time it is made, they may still be held liable for its terms if they later gain the necessary capacity.