Sally and Kimberly are creating a contract to work together to plan and host an event. What key principle ensures each party signing the contract has the required authority to enter into the contract? (1 point) Responses Legal purpose Legal purpose Offer and acceptance Offer and acceptance Legal capacity Legal capacity Exchange of value
Legal capacity
The key principle that ensures each party signing the contract has the required authority to enter into the contract is "Legal capacity."
The key principle that ensures each party signing the contract has the required authority to enter into the contract is "Legal capacity." Legal capacity refers to the mental ability and legal authority of each party involved in a contract to understand the terms and consequences of the agreement.
To determine legal capacity, you need to consider the following steps:
1. Verify Age: Ensure that both Sally and Kimberly are of legal age to enter into a contract. The legal age varies in different jurisdictions, but typically it is 18 years old. If either of them is below the legal age, they might not have the legal capacity to enter into a contract, unless there are specific exceptions or provisions in their jurisdiction.
2. Consent: Make sure that both Sally and Kimberly are mentally capable of understanding the terms and implications of the contract. They should have the mental capacity to comprehend the obligations, responsibilities, and rights associated with the agreement. If either of them lacks the mental capacity, for example, due to a mental illness or disability, they might not have the legal ability to enter into a contract.
It is important to note that legal capacity does not consider the authority to act on behalf of an organization or entity. If Sally or Kimberly is representing an organization, they should also have the necessary authority delegated to them by the organization, such as through a power of attorney or employment contract.
By ensuring legal capacity, you can be confident that both parties have the required authority to enter into the contract and will be held accountable for their obligations and rights as per the agreement.