Which of the following is a defense to enforcement of a contract?

• A. Ambiguity
• B. Lack of capacity
• C. Public policy
• D. Mutual mistake

Answer: (B)

Lack of capacity makes a contract voidable and thus a defense to enforcement. If a party is a minor, or is intoxicated or mentally incompetent at the time of contracting, they typically can disaffirm the contract, and it won’t be enforceable against them unless they later ratify it or the contract involves necessities, in which case they must pay reasonable value. This protection exists because enforcing an agreement with someone who cannot understand what they are agreeing to would be unfair or impractical.

Ambiguity mainly affects how terms are interpreted or how evidence is used to interpret them, not a blanket defense to enforceability. Public policy can invalidate contracts in limited, specific contexts (like illegal purposes or certain restraints), but it’s not the broad, classic defense that applies whenever capacity is lacking. Mutual mistake can void or voidable a contract only if both sides shared a fundamental misunderstanding, which is not as universally applicable as the capacity issue.