What does "legal capacity" mean in contract law?

In contract law, "legal capacity" refers specifically to the ability of a party to enter into a contract. This means that the party must have the mental competency and legal authority to understand the terms of the contract and the consequences of entering into it. It ensures that individuals entering into a contract are capable of making informed decisions and are of a legal age, usually 18 years or older, and not under duress, intoxication, or mental incapacity.

The other choices address different aspects related to contracts. For instance, the authority of a party to represent another concerns agency law rather than the contract formation itself. Professional licensing relates to specific occupations and ensures that individuals are qualified to perform certain services, but it is not directly related to the contract's validity or the capacity to enter one. Finally, the timeframe in which a contract must be executed pertains to statutes of limitation or conditions for performance rather than the concept of legal capacity to enter into a contract.