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

• 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 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 the memorandum of association. A person of unsound mind has no capacity to contract.



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