law

competent party

A person who has the legal capacity to enter into a binding contract, generally meaning they have reached the age of majority and are mentally competent and not legally incapacitated. Contracts with minors are usually voidable by the minor, while contracts signed by someone adjudged legally incompetent may be void. Competent parties are one of the essential elements of a valid contract.

Exam tip
Memorize the elements of a valid contract: competent parties, offer and acceptance, consideration, legal purpose, and (for real estate) a writing. A minor's contract is voidable, not void.
Example
A 17-year-old signs a contract to buy a condo; in most states she may cancel it because she was not a competent party.

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Last verified: 2026-10-23