In contract law, the capacity of parties refers to their legal competence or ability to enter into a contract. Not everyone has the legal capacity to form a contract, and parties lacking the necessary capacity may render a contract void or voidable. Here are the key aspects of the capacity of parties in contract law:

1. Legal Capacity:

   • To have legal capacity, a person must meet certain criteria, which typically include being of sound mind and of a certain age. Legal capacity ensures that the party can understand the nature and consequences of the contract they are entering into.

2. Minors:

   • Minors, generally individuals under the age of 18, are often considered to lack full legal capacity. Contracts entered into by minors are typically voidable at the option of the minor, meaning that the minor can choose to enforce the contract or void it. However, the minor's right to void a contract may be limited in some situations, such as for contracts related to necessities like food and shelter.

3. Mental Incapacity:

   • Individuals who lack the mental capacity to understand the nature and consequences of a contract may also lack legal capacity. This can include individuals with cognitive impairments, mental illnesses, or individuals under the influence of drugs or alcohol at the time of contract formation.

4. Intoxication:

   • Contracts entered into while a person is under the influence of alcohol or drugs may lack capacity if the intoxication impairs their judgment to the point where they do not fully comprehend the contract's terms and implications. Intoxicated individuals may have the option to void the contract when they regain sobriety.

5. Duress and Undue Influence:

   • Parties may lack capacity if they entered into a contract under duress (under threat or pressure) or undue influence (manipulation or coercion by another party). Contracts entered into under such circumstances may be voidable.

6. Guardianship:

   • In cases where an individual has been declared legally incapacitated by a court and placed under guardianship, their legal capacity to contract may be restricted, and the guardian may have control over their contractual matters.

It is important to note that parties with limited capacity, such as minors, are not automatically precluded from entering into contracts. However, the law provides protection for individuals who may lack the capacity to understand the full consequences of their actions. As a result, contracts involving parties lacking capacity are often considered voidable, meaning that they can be affirmed or voided based on the choice of the incapacitated party.

When dealing with contracts and questions of capacity, it is advisable to consult with legal counsel to ensure that the contract is valid and legally enforceable. Parties should be aware of the capacity requirements in their jurisdiction and consider the specific circumstances of each contract to determine whether all parties have the necessary legal capacity to enter into the agreement.