Which of the following is NOT a component of 'capacity'?

Capacity refers to the legal ability of a person to enter into a contract. It generally includes several key components that determine whether someone has the capacity to agree to a legally binding contract.

Age is crucial because individuals must reach a certain age, usually the age of majority, to have the capacity to contract—this varies by jurisdiction but typically is 18 years old in Queensland.

Understanding is also a key component; a person must comprehend the nature, purpose, and consequences of the contract they are entering into. This ensures that the individual can make informed decisions when agreeing to terms.

Intent to enter into a contract is another essential element because the parties involved must genuinely intend to create a legal obligation. Without this intent, the contract may be deemed unenforceable.

In contrast, financial status does not constitute a component of capacity in the legal sense. A person's financial situation does not determine their ability to understand the nature of a contract or their legal standing to execute one. Even if an individual is in severe financial distress, they may still have the legal capacity to enter into agreements, unless other factors (like mental incapacity or age) negate that ability.

Therefore, financial status is not a component of capacity in the context of entering into contracts, making it