What Does Capacity of Parties Mean?

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What does Capacity of Parties mean? Read on to discover the definition & meaning of the term Capacity of Parties - to help you better understand the language used in insurance policies.

Capacity of Parties

Capacity of Parties

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.

We hope the you have a better understanding of the meaning of Capacity of Parties.

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