When a party is not capable of understanding a contract they may lack the required element of capacity.

Question

Quizplus · Accepted Answer

This statement is true. Capacity refers to a party's ability to understand the terms of a contract and the legal consequences of entering into one. If a party does not have the mental capacity to understand a contract, they may lack capacity and the contract may be invalid or unenforceable.

When a Party Is not Capable of Understanding a Contract