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<h1>Capacity: sound mind requirement for contracts - validity depends on ability to understand and form rational judgment.</h1> Contractual capacity requires that, at the time of making the contract, a person can understand it and form a rational judgment about its effect; those usually of unsound mind may contract during lucid intervals, while those usually sound cannot contract while temporarily incapable; temporary delirium or intoxication that prevents understanding negates capacity for that period.