Which term describes the legal ability of a party to enter into a contract?

The correct term that describes the legal ability of a party to enter into a contract is "capacity." In legal terms, capacity refers to the competence of a party to understand and engage in a contractual agreement. This ability is crucial because a party lacking capacity, such as minors or individuals deemed mentally incapacitated, may not be able to enter into a binding contract.

When considering a contract, it's essential to ensure that all parties involved possess the requisite capacity to make the agreement valid and enforceable. Capacity is fundamentally about whether the parties can legally undertake the obligations that the contract entails.

Consent, while important, refers to the mutual agreement between the parties to enter into the contract rather than their ability to do so. Consideration involves the value exchanged in the contract and is distinct from the parties' legal ability. Legitimacy relates to the legality of the agreement itself rather than the parties' competence to enter into it. Thus, capacity is the most relevant term when discussing a party's legal ability to contract.