Capacity to contract means a party is competent to enter into a legally binding contract.
Those who are intellectually and legally capable of signing contracts that are enforceable by law are referred to as competent parties. Some people, like children, those who are intoxicated or on other drugs, and those who are mentally ill but not mad, have a limited capacity to contract. Persons with limited capacity to contract who are incompetent may renege on their agreements.
Disaffirmance is the name for this legal right to withdraw. Others lack any legal competence to contract since they are so totally incompetent. This group includes those with mental diseases who have been adjudicated crazy by a court.
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