Question

1. The plaintiff was diagnosed as a manic depressive and had been hospitalized and under treatment for many years. The plaintiff’s psychiatrist testified that while in the manic phase of his illness, the plaintiff felt euphoric and invincible, and his judgment and behavior were grossly affected. While in such a state, the plaintiff bought from the defendant the privilege of selling a mechanical device to the government under a license that required considerable sales work. The plaintiff’s attorney testified that neither he nor the plaintiff’s wife intended to let him go through with the deal, but they thought it would be good therapy if he went through with the negotiations. The defendant did not know about the plaintiff’s condition. Does a mental disorder that affects a person’s judgment, but not the ability to understand, qualify an individual as an incompetent unable to contract?

Answer 1

A contract is invalid if one of the parties at the time of making it was incapable of understanding and with a poor judgement what he was doing due to unsoundness of mind.

Contract entered into with a mentally ill person may be valiid If the other party did not know that other party was mentally ill and the contract is a fair contract.

In this case the patients judgement is affected eventhough understanding is present he is not qualified to present a contract.