Which of the following statements about "capacity" is true?

The correct choice highlights the importance of age and mental competence requirements in establishing an individual's legal capacity to enter into contracts. Capacity refers to the ability of parties to understand the terms and implications of a contract and to be held accountable for their obligations under that contract.

Individuals must be of a certain age, typically the age of majority, to enter into legally enforceable contracts. In many jurisdictions, this is generally 18 years old. Additionally, individuals must possess mental competence, meaning they must have the mental ability to understand the nature and consequences of their contractual commitments. If a party lacks either the appropriate age or mental competence, they may be able to void or rescind the contract.

The other statements do not accurately represent the principles of contract law regarding capacity. For instance, the misconception that only corporations have legal capacity ignores the fact that individuals can also legally enter into contracts as long as they meet the relevant criteria. The assertion that minors can always enter enforceable contracts overlooks the legal protections in place for minors, who typically can void contracts they enter into, even if those contracts are enforceable for adults. Lastly, the claim that capacity is irrelevant to the validity of a contract contradicts the fundamental legal requirements that must be met for a contract to be considered