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Capacity is subject to different meanings, but in the legal sense, it refers to the ability to make a rational decision based upon all relevant facts and considerations. In criminal law, the defendant must have the capacity to understand the wrongfulness of his or her actions. In making a will, the maker of the will must have testamentary capacity, meaning that he/she must understand the nature of making a will, have a general idea of what he/she possesses, and know who are members of the immediate family or other "natural objects of his/her bounty.
Capacity to make contracts may be lacking in the case of minors or mentally disadvantaged persons. A contract signed by a person lacking capacity may be void or voidable.