Who must be capable of entering into a contract according to legal definitions?

The correct response highlights that both parties involved in a contract must have the legal capacity to enter into that contract. This concept is essential in contract law and applies to all types of agreements, including insurance contracts.

For a contract to be valid, both parties must typically meet certain criteria: they should be of legal age (usually 18 years or older), possess mental competence, and not be under duress or undue influence at the time of signing. This requirement ensures that both the insurer and the applicant have the ability to understand the terms and implications of the contract they are entering into, thus promoting fairness and enforceability.

When only one party is considered for legal capacity, as suggested by the other choices, it would undermine the validity of the contract. It would also open the door to potential legal disputes regarding the enforceability of the contract if one party lacks the necessary capacity.