What is the term for a contract entered into by someone who lacks legal capacity?

A contract entered into by someone who lacks legal capacity is referred to as a voidable contract. This is because the individual lacks the legal authority to engage in a contract due to reasons such as being a minor, mentally incapacitated, or under duress. In such instances, the contract is not automatically void; rather, it can be affirmed or rejected by the party lacking capacity once they gain the ability to understand the terms and implications of the contract. This allows them to choose to uphold the contract or to void it, which is crucial in protecting the rights of individuals who may not fully understand their obligations.

In contrast, a binding contract is one that is legally enforceable by the parties involved, but this applies to those who have legal capacity. A legitimate contract refers generally to legally binding agreements without specific reference to capacity. An enforceable contract signifies a valid contract that can be upheld in a court, which typically does not include those entered into by individuals lacking capacity. Hence, the classification as a voidable contract accurately encapsulates the condition of the agreement under these circumstances.