Final answer:
The consequence of contracting with absolutely incapacitated persons leads to the contracts being considered void, resulting in noncompliance and reduced transactions due to lack of legal enforcement. This situation undermines confidence in business dealings and slows economic development. Legal systems enforcing contracts and property rights are vital for reliable business transactions and market stability.
Step-by-step explanation:
The consequence of contracting sales with absolutely incapacitated persons is that the contracts entered into are typically considered void ab initio (void from the beginning). In such situations, the incapacitated person is not legally able to give consent or enter into contracts, which means any agreement made is not legally binding. This can lead to noncompliance issues, because the party expecting to benefit from the contract, like a skilled surgeon expecting payment after providing services, has no legal means to enforce the contract and secure payment. This lack of enforcement reduces the willingness of individuals and entities to engage in transactions, potentially slowing economic growth due to increased risk of non-payment and non-fulfillment of contractual obligations.
Moreover, legal systems play a crucial role in upholding contract law, as without enforcement of contracts, there is a risk that business transactions become unreliable. For example, if insurance companies cannot contract effectively due to adverse selection or unable to differentiate between high and low-risk individuals, they may withdraw from the market. This illustrates how essential it is for legal systems to have laws and regulations that support the enforcement of contracts, including those with property rights and contractual rights.