Final answer:
The law presumes that individuals have the legal and mental capacity to enter into contracts, meaning they can understand and agree to a contract's terms. This presumption can be challenged for minors, those with mental incapacities, or individuals under substance influence. Legal cases and protections exist to assess and protect those potentially lacking in legal competence or capacity.
Step-by-step explanation:
The law generally presumes that parties have the legal and mental capacity to contract. This means that individuals are assumed to be able to understand the terms and conditions of a contract, and to make a binding agreement. However, certain individuals are recognized as lacking this capacity, such as minors, mentally incapacitated persons, and those under the influence of drugs or alcohol.
Competence is a legal term relating to whether a person can enter into a legal agreement. Case law, such as Dusky v. United States and Godinez v. Moran, demonstrates the court's role in determining competency in criminal cases. While these cases do not directly address contractual competency, they illustrate the legal standards for assessing an individual's capacity to make legal decisions.
There are exceptions to this presumption of capacity, such as for children, who cannot consent for themselves, and individuals with cognitive disabilities, who are protected from certain legal actions like the death penalty or being tried as adults in some cases. Contractual rights are therefore tied closely to an individual's ability to understand and consent to the use of their own property or services within an agreement.