Final answer:
A contract that is voidable due to capacity issues can be canceled by the party who lacked capacity, typically a minor or someone mentally incapacitated. The party with capacity cannot cancel the contract on these grounds. Examples include minors entering contracts for non-essential goods or services.
Step-by-step explanation:
A contract voidable due to capacity issues can, in fact, be canceled by the party lacking capacity. This means that if a party to the contract did not have the legal capacity to enter into the contract, such as being a minor, mentally incapacitated, or under duress, they have the option to either affirm or cancel the contract. On the other hand, the party that did have the capacity to contract cannot cancel it on the grounds of the other party's lack of capacity.
As an example of capacity affecting contract validity, consider the case of a minor entering into a contract for a non-essential good or service. This contract is voidable at the option of the minor, but the adult party cannot void it on this basis. However, it is important to note that some contracts involving minors, like those for necessities, may not be voidable.