In contract law, the capacity of parties refers to their legal ability to enter into a binding agreement. To have contractual capacity, individuals must be of sound mind and legal age. Minors, mentally incapacitated individuals, and those under the influence of substances might lack the capacity to form a valid contract. If a party lacks capacity, the contract may be voidable at their discretion. However, contracts with individuals lacking capacity are not always automatically void; they may be enforceable if the incapacitated party chooses not to void the contract once their capacity is restored.