Capacity to contract, governed by Sections 11-12, determines who can legally enter contracts. Persons with full capacity: Adults (18+ years) of sound mind and not disqualified by law. Minor's capacity: Minors (below 18) cannot contract; agreements with minors are void. Exceptions: Minors can ratify contracts after majority; minors need guardians for consent. Persons of unsound mind: Cannot contract unless lucid interval proves understanding. Persons disqualified by law: Alien enemies, undischarged bankrupts, convicts under sentence. Minor's right to ratify: After becoming adult, minor can adopt contract but cannot partially ratify. Restitution: If minor received benefits, they must return or account for benefits received. Guardian's role: Guardian contracts on minor's behalf; liability rests with guardian. Case law: Mohiri Bibi v. Dharmodas Ghose establishes minors cannot be sued for breach. For accountants: Employment of minors regulated; contracts with minors require guardians' consent; minors cannot be held liable as guarantors. Exam tip: Identify capacity at contract formation; minor's capacity is incapacity; focus on ratification rights after majority.