What is meant by the expression “contractual capacity”? Illustrate your answer with use of appropriate examples

What is meant by the expression “contractual capacity”? Illustrate your answer with use of appropriate examples

ANSWER

• This is the legal ability of a party to enter into a contractual relationship.
• Not every person has capacity to enter into any contractual relationship.
• A contract entered into by a person with no capacity to contract is unenforceable, for example an infant has no capacity to enter into money borrowing transactions. A registered company has no capacity to enter into transactions beyond the objects prescribed by the memorandum of association. A person of unsound mind has no capacity to contract.