The capacity to contract refers to a person’s legal ability to enter into a binding agreement or contract. In most legal systems, only some are considered capable of entering a contract. Certain individuals, such as minors, people with mental disabilities, and those under the influence of drugs or alcohol, may lack the legal capacity to enter a contract.
In many jurisdictions, individuals under a certain age (usually 18) are considered minors and may not have the legal capacity to enter into contracts. However, there are exceptions for certain types of contracts, such as contracts for necessities.
People with mental disabilities or those who are not of sound mind may lack the capacity to understand the terms and consequences of a contract. In such cases, contracts entered into by individuals with mental incapacity may be voidable.
If a person is under the influence of drugs or alcohol to the extent that they cannot understand the terms of a contract, the contract may be voidable.
It is worth mentioning that contract laws can vary between jurisdictions, and the specifics may differ. Legal systems often aim to protect individuals who may be vulnerable due to age, mental capacity, or other factors. Suppose a party lacks the capacity to contract. In that case, the contract may be voidable at their option, meaning they can choose to affirm or void the contract once their capacity is restored or the circumstance causing the incapacity is resolved.