Which of the following would NOT have a restricted ability to enter into a contract?

• A. Mentally ill person
• B. Minor
• C. Person under the influence of alcohol
• D. Small employer

Answer: (D)

Understanding capacity to contract means recognizing who can legally bind themselves to agreements. A contract requires that the parties understand the nature and consequences of the deal and act with competence. Minors generally lack full legal capacity, so their contracts are typically voidable at the minor’s option (though they may be enforceable for necessities). A mentally ill person may be unable to understand or appreciate the transaction, limiting enforceability. A person under the influence of alcohol may not grasp the terms or consequences, making the contract potentially voidable. A small employer, as an adult not under guardianship and not impaired, has the normal capacity to enter into contracts. So this option describes someone with unrestricted ability to contract.