Capacity of Parties | Capacity to Contract | Indian Contract Act | Business Laws

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*Capacity of Parties Meaning
Capacity of parties refers to each party who is entering a contract being required by law to have the mental and intellectual capacity to understand the terms of the contract and to make the decision to enter it. Therefore, people such as minors, the insane, and people under the influence of drugs would not legally meet the capacity required to enter into an insurance contract.
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