True or False: Capacity ensures that each party can only promise to do something.

Capacity in contract law refers to the legal ability of individuals or entities to enter into a binding agreement. This concept ensures that parties engaged in a contract have the requisite mental competency, age, and legal standing to comprehend the terms and implications of the contract they are entering.

When we state that "capacity ensures that each party can only promise to do something," it implies a restrictive understanding of capacity, as it suggests that parties are limited merely to making promises without the full understanding or ability to fulfill them. However, capacity implies more than just making promises; it encompasses the ability to understand the contract and its obligations, allowing parties to create enforceable agreements.

While capacity can indeed impact the enforceability of a contract, the statement incorrectly simplifies the concept. Hence, the statement being false reflects the broader understanding of capacity in contract law, emphasizing that it involves much more than the act of promising. Additionally, capacity is not limited to verbal contracts or only established by law; it's a fundamental principle that applies across all types of contracts.