Question

Contracts by Mentally Incompetent Persons: (1) Void: If a court has declared a person to be mentally incompetent, and has appointed a legal ____, any contract made by that person is void from the outset. (2) Voidable: If a court has not declared a person mentally incompetent, but that person _____ the capacity to comprehend the subject matter, _____, and consequences of the agreement, then the contract is voidable at the person's option. (3) Valid: If a court has not declared a person mentally incompetent and that person was able to _____ the nature and effect of the contract at the time it was formed, then the contract is valid and ____.

1) guardian
2) lacks, understand, aware
3) understand, enforceable

Answer 1

Contracts by mentally incompetent individuals vary in their legal standing. If an individual has been deemed mentally incompetent by a court and assigned a guardian, contracts they enter are void. Without formal declaration, contracts are voidable if the person doesn't understand the contract, and valid and enforceable if they do.

Step-by-step explanation:

When assessing the validity of contracts by mentally incompetent persons, different legal standards apply based on the individual's mental capacity and any court determinations regarding their competence:

1. Void: If a court has declared a person to be mentally incompetent and has appointed a legal guardian, any contract made by that person is void from the outset.
2. Voidable: If a court has not declared a person mentally incompetent, but that person lacks the capacity to comprehend the subject matter, understand, and consequences of the agreement, then the contract is voidable at the person's option.
3. Valid: If a court has not declared a person mentally incompetent and that person was able to understand the nature and effect of the contract at the time it was formed, then the contract is valid and enforceable.