Contract Glossary
Legal Capacity
Definition
The legal ability of a person or entity to enter into a binding contract. Minors (under 18 in most states), people who are mentally incapacitated, and intoxicated individuals generally lack capacity. A contract signed without capacity can be voided.
In Practice
Before signing any contract, verify that the person signing has the authority to bind themselves or their organization. For businesses, check that the signatory is an authorized officer or has a power of attorney. For individuals, mental competency and age matter. A contract with a 16-year-old is voidable at the minor's discretion — they can walk away, but you can't.
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Frequently asked questions about legal capacity
They can sign one, but it's generally voidable at the minor's option. The minor can choose to honor or cancel the contract. The adult party is still bound. There are exceptions: contracts for necessities (food, housing, medical care) are enforceable against minors in most states.
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Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.