Which statement is an appropriate defense to contract formation?

Which statement is an appropriate defense to contract formation?

• A. Lack of capacity.
• B. Consideration present.
• C. The contract is legal.
• D. There is a definite offer.

Answer: (A)

The key idea is that capacity to contract can serve as a defense to formation. A party who lacks capacity—such as a minor, someone adjudicated mentally incompetent, or a person intoxicated to the point of not understanding the agreement—cannot be bound in the same way as a fully capable adult. Because they may not grasp the nature and consequences of the deal, the contract is usually voidable at their option. That means they can choose to disaffirm the contract, returning or avoiding obligations, which makes lack of capacity an effective defense to enforcing the contract against them. The other statements describe elements or conditions that typically support formation (having consideration, the contract being legal, and there being a definite offer), not defenses to formation.

The key idea is that capacity to contract can serve as a defense to formation. A party who lacks capacity—such as a minor, someone adjudicated mentally incompetent, or a person intoxicated to the point of not understanding the agreement—cannot be bound in the same way as a fully capable adult. Because they may not grasp the nature and consequences of the deal, the contract is usually voidable at their option. That means they can choose to disaffirm the contract, returning or avoiding obligations, which makes lack of capacity an effective defense to enforcing the contract against them. The other statements describe elements or conditions that typically support formation (having consideration, the contract being legal, and there being a definite offer), not defenses to formation.