Which of the following refers to the legal ability to enter into a contract?

• A. Legitimacy
• B. Competence
• C. Capacity
• D. Substantive

Answer: (B)

The term that accurately refers to the legal ability to enter into a contract is capacity. Capacity is a fundamental concept in contract law, emphasizing that all parties involved must possess the mental and legal capability to understand the terms of the contract and the consequences of entering into it. This means that individuals should be of legal age, typically considered to be at least 18 years old, and must not be under any mental impairment or duress that would affect their judgment.

Legitimacy does not pertain to the ability to enter into contracts; rather, it generally relates to the legality or authenticity of a status or condition. Substantive refers to the essential provisions and content within a law or contract, but it does not address the parties' capability to engage in a binding agreement. Competence is often used interchangeably with capacity in other contexts but may not specifically refer to the legal ability to contract, which is the focus here. Thus, capacity is the most precise term for the legal requirement to form a valid contract.