Capacity, in relation to binding contracts, means that the contracting parties MUST meet all of the following requirements EXCEPT

Reaching the legal age is a fundamental requirement for capacity in contract law. Individuals must be at least 18 years old in most jurisdictions to enter into binding contracts, ensuring that they possess the maturity and understanding necessary to make informed decisions.

Having authority is crucial as it determines whether a person can legally bind another party to a contract. For example, agents must have the proper authority granted by the principal to ensure that any agreements made are valid and enforceable.

Mental competence is essential for capacity, as individuals must understand the nature and consequences of the contract they are entering. If a person is deemed mentally incompetent, any contracts they enter into may be voidable, protecting those who cannot fully grasp the implications of their actions.