What does "legal capacity" mean?

Legal capacity refers to an individual's ability to enter into legally binding contracts. This concept is foundational in contract law, as it ensures that parties involved in an agreement possess the necessary mental competence and age, in addition to being free from coercion or undue influence, to understand the nature and consequences of their contractual commitments.

In this context, while the ability to understand legal documents can be a significant factor, it is not the sole determinant of legal capacity. A person may comprehend a legal document but still lack the capacity to form a binding contract if, for example, they are a minor or declared mentally incompetent. Similarly, the right to represent oneself in court deals with legal representation rather than the ability to enter contracts, and the requirement to be a citizen is not universally applicable to entering agreements, as many jurisdictions allow non-citizens to contract. Therefore, the ability to enter into legally binding contracts effectively encapsulates the essence of legal capacity.