Legal capacity refers to a person’s ability to make binding legal agreements, sue others, be sued, and make other legal decisions - Legal capacity introduction. When the law indicates that a person lacks capacity to engage in specific activities, any contract the person may form is considered void or voidable. There are many different types of incapacity.
One type of incapacity refers to age. Those who have not reached the required legal age to enter binding agreements are considered to lack legal capacity to contract. These people are often referred to as minors or infants. For example, if a person who is younger than eighteen years of age signs a contract to purchase a house, the contract will be voidable because the minor does not have legal capacity to enter a contract and have it enforced against him. In most states, a contract to which a person who lacks capacity due to age will be considered voidable. This means that the minor typically can escape his contractual duties in the contract at any time, and the other party cannot ask the court to enforce the contract. The state or federal government determines the age at which a person may participate in certain legal activities (i.e. voting, purchasing alcohol, getting married, etc). In some cases, a minor may be able to gain capacity through the process of emancipation.
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Some people may suffer from mental or medical conditions which cause them to lack legal capacity. When a person has a medical condition that prevents him from achieving the performance levels that a normal person might be capable of, this person may be relieved of his contractual duties. People who have mental defects which affect their ability to make sound choices also are not necessarily bound to the contracts they form. This is because the legal system seeks to protect the mentally ill and insane from making choices that are contrary to their own interests. When a person who lacks mental capacity enters a contract, the contract is also considered voidable. For example, if a person who has a mental illness agrees to sell his house for $5 but he later decides not to sell, the other party will not be allowed to sue the mentally party to enforce sale of the home. In some instances, the courts may declare the person a ward of the state and appoint a legal guardian to oversee the person’s legal decision-making. There is no concrete universal rule that determines whether a person lacks mental capacity; courts apply different tests to determine whether the person has the capacity to form a binding contract.