What characterizes "capacity" in a contract?

Capacity in a contract refers to the legal ability of the parties involved to create enforceable agreements. For a contract to be valid, all parties must have the capacity to understand the terms and implications of the agreement. This typically involves factors such as being of legal age, mentally competent, and not under duress or undue influence. If any party lacks capacity, the contract may be deemed void or voidable, meaning it cannot be enforced.

The other choices pertain to different aspects of contract law but do not accurately capture the definition of capacity. The duration of a contract’s validity relates to its enforceability over time, written documentation is often required for certain types of contracts but does not address the parties' abilities, and consideration refers to the value exchanged within a contract rather than the legal status of the parties involved. Hence, understanding capacity is crucial because it ensures that those entering into contracts are able to comprehend and fulfill their contractual obligations legally.