Which covenant term indicates that the grantor has both the legal capacity and title to convey?

The term that indicates the grantor has both the legal capacity and title to convey is known as the "Right to convey." This covenant assures the grantee that the person transferring the property has the legal authority to do so and that they hold clear title to the property being conveyed. This is crucial in real estate transactions as it protects the grantee from future claims on the property that might arise from the grantor's lack of authority or title issues.

In contrast, the other options relate to different legal concepts. For example, "Right of way" generally pertains to the legal right to pass through property owned by another, which does not address the grantor's capacity or title. "Right to use" refers to permissions granted for the use of a property, which also does not imply anything about the grantor's ability to convey ownership. The "Right of first refusal" gives a party the first opportunity to purchase a property before it is offered to others, but it does not involve issues of title or legal authority in conveying ownership. Thus, "Right to convey" stands out as the term that directly specifies the legal capacity and title aspect of the grantor's abilities in a property transaction.