|CAPACITY OF THE PARTIES|
|Parties to a contract must, at the time when the contract is made, have the legal capacity to make the contract.|
|While contractual promises are enforceable against anyone having legal capacity, some persons are deemed by law as either incapable of contracting or having only limited capacity to contract. In cases involving limited capacity, the contract is usually considered voidable; that is, the contract is valid until the individual goes to court to void it. As long as the person of limited capacity allows the contract to exist, it may not be voided. Some examples of those with limited capacity to enter a contract include:|
|For purposes of parties to a contract, any person declared to be mentally incompetent is incapable of contracting. Any representation agreement or agreement of purchase and sale entered into by such a person for the purchase, sale, exchange or other disposition of property is voidable. If a person does not declare his/her mental incompetency and the other party knows of this mental incompetency, then the contract may be voidable by the undeclared mentally incompetent person. Expert advice is required on such matters.|
Under contract law, two conditions must generally exist in order that a buyer or seller can avoid a contract based on the fact that he or she was intoxicated. First, the individual must have been so inebriated when the contract was signed that he or she did not understand what was taking place. Second, the condition of that party must be known to the other party to the contract. If these two conditions are satisfied, then such a contract would be considered to be voidable.