What describes the legal competence of a person to enter a valid contract?

Capacity is the term that describes the legal competence of a person to enter into a valid contract. This concept is fundamental in contract law, as it ensures that individuals have the requisite mental ability and legal status to understand and agree to the terms of a contract. For a contract to be enforceable, the parties involved must possess the capacity to understand the implications of the agreement, which generally includes being of the minimum age (often 18 years), sound mind, and not under duress or undue influence.

When considering the other terms, accountability refers to the obligation of a party to be responsible for their actions, authority pertains to the power of an individual to act on behalf of an organization or entity, and validity relates to whether a contract meets all legal requirements to be enforceable. While these concepts are important in the realm of contracts, they do not specifically address the legal competence of a person to engage in a binding contract, which is precisely what capacity defines.