Which term refers to the legal ability of a party to enforce a contract?

The term that best describes the legal ability of a party to enforce a contract is "capacity." In contract law, capacity refers to the legal competency of an individual or entity to enter into a binding agreement. This means that the person or entity must have the mental ability to understand the terms and implications of the contract they are entering into. Typically, this excludes minors, individuals who are mentally incapacitated, and sometimes intoxicated individuals, as they may not fully understand the nature of their commitments.

While validity pertains to whether a contract meets all the necessary requirements to be legally recognized, and enforceability relates more specifically to whether a contract can actually be upheld in a court of law, capacity is fundamental as it directly impacts whether a party can legally enter into or enforce the contract in the first place. Legitimacy is not a standard term used in contract law to describe a party's ability to enforce a contract. Thus, capacity is the most precise term to refer to the legal ability to enforce a contract.