A person must have legal capacity in order to create a contract. Generally, a person has legal capacity if he is an adult and has the mental capacity to understand the general nature and consequences of the contract. If a person who lacks legal capacity enters into a contract, the contract is probably unenforceable.

Persons Who Lack Legal Capacity

* Minors. A minor lacks the legal capacity to enter into a contract without the consent of his parent or guardian. Most states define a minor as a person under the age of 18. Generally, a contract entered into by a minor without parental consent is unenforceable. However, a court may permit the enforcement of a minor's contract for food, clothing, or other necessities.

* Mentally Ill Persons. A mentally ill person may lack the legal capacity to enter into contracts. If a person's mental illness prevents him from understanding the general nature and consequences of the contract, then he lacks mental capacity. A person who lacks mental capacity also lacks legal capacity. A court will determine whether a person has the mental capacity to enter into a contract.

* Intoxicated Persons. In some cases, a person lacks legal capacity if he is intoxicated when he enters into a contract. For an intoxicated person, the controlling issue is mental capacity. If the person's intoxication prevented him from understanding the general nature and consequences of the contract, then he lacks mental and legal capacity.

Corporations

Although some legal texts define a contract as a legally enforceable agreement between one or more "persons," corporations have the legal capacity to enter into contracts. The contract will usually be binding on the corporation rather than the person who signed the contract on behalf of the corporation.

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