2009 Contract Law
Q1) Explain the law on capacity to contract. Provide full authority for your answer
In order to enter into a valid contract, both parties must have capacity. Capacity is effected by a person’s age and mental capacity. The formalities are prescribed in certain contracts set out in the Requirements of Writing (scot) Act 1995.
Capacity of legal age in Scotland is 16. There are special provisions for those under 16. Anyone over 16 and in full command of their faculties can make contracts. Age of legal capacity (Scotland) Act 1991. This separates a person’s capacity into 3 periods. In general, anyone under 16 is deemed to have no capacity to enter into transactions (parents usual legal representatives) . Children are able to enter a transaction provided two conditions are met; 1) transaction must be of a kind commonly entered into by persons of that age and circumstances. 2) The terms of the transaction must be reasonable. Cumulative. If one is breached transaction is void.
A person of unsound mind has no contractual capacity. Most “contracts” made by an insane person are void. If a curator bonis has been appointed to manage the insane person’s affairs, the latter has no contractual capacity at all. If a curator has not been appointed and the person’s mental state is fluctuating then his contracts will only be valid if made during a lucid interval. An on-going contract does not necessarily lapse in the event of the supervising insanity of one party
Louden v Elders CB 1923
Dundee meat retailer ordered supply from Liverpool firm while insane, unknown to supplier , certified insane after order but before delivery, CB appointed and cancelled order, supplier sought damages for breach. Held, No liability as contract void.
Contrast with English Law – Hart v Connor 1985
For a breakdown of the laws in America, Florida abogados de accidentes
Mentally unsound P bound to sell land as the other P did not know of incapacity when bargain was made.
Wink v Mortimer 1849 ( find cases)