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we next turn to the issue of legal capacity the basic presumption in contract law is that anybody can enter into a contract however certain individuals may not have the ability to fully understand the nature of their obligations that flow from a contract therefore the law protects certain societal groups by avoiding situations where they become bound by contract this is where the concept of legal capacity comes in according to it some individuals are held to lack the ability to enter into contracts the groups or individuals that are deemed to lack legal capacity include the following minors that is persons under the age of 18 mentally incompetent persons and intoxicated persons that is those that are under the influence of excessive amounts of alcohol or drugs the test for legal capacity of mentally incompetent and intoxicated persons is whether they are able to understand the nature and consequences of their contracts at the time the contract was created if not they have no legal cap