What constitutes "legal capacity" to enter contracts?

Legal capacity to enter contracts refers to the ability of an individual to understand the nature and significance of the agreements they are entering into. This capacity is primarily determined by two key factors: age and mental competency.

Being of legal age means that a person has reached the age set by law, which typically varies by jurisdiction but is often 18 years or older. This is the minimum age at which an individual can enter into a binding contract without parental or guardian consent.

Mental competency involves the ability to understand the consequences of one's actions in relation to the contract. This means that a person should not be suffering from a mental disorder, intoxication, or any other condition that impairs their ability to reason or comprehend the agreement they are making.

Other choices, such as a certain income level, possessing a college degree, or owning other properties, do not directly affect one’s legal capacity to contract. Legal capacity focuses specifically on age and mental acuity, rather than financial status or educational background. Thus, the correct answer highlights the essential legal criteria required for a person to validly engage in contractual obligations.