What is required for all parties involved in a contract to be considered competent?

For all parties involved in a contract to be considered competent, they must possess the legal capacity to enter into a contract. This capacity includes being of a certain age, typically the age of majority, which varies by jurisdiction, as well as having sound mental faculties. Legal capacity ensures that the individuals involved understand the terms and implications of the agreement they are entering into.

While other factors, such as financial stability and the ability to read and write, can influence a person's capacity to manage contracts effectively, they are not requirements for legal competence in the context of contract law. Legal capacity is the foundational requirement that validates the enforceability of a contract and protects parties from entering into agreements they do not fully understand or cannot legally commit to.