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In the context of contracts, they can be categorized as valid, void, or voidable. A voidable contract allows one or both parties to declare it void, often due to circumstances like a lack of capacity, fraud, or misrepresentation. For instance, if a contract is made with someone lacking mental capacity, such as a minor below the age of majority (typically 18), that minor can choose to void the contract at any time before reaching the age of 18, reclaiming any money or benefits exchanged. This highlights the importance of understanding the age and capacity of parties involved in contract agreements.