Which of the following is a correct statement regarding the test of contractual incapacity?
A) The test usually applied in contract law is whether a party, at the time the case is litigated, had sufficient mental capacity to understand the nature and effect of the contract.
B) A person could be medically insane but still have the legal capacity to contract.
C) A person who is senile cannot enter into a binding agreement.
D) A person with less-than-ordinary intelligence cannot enter into a binding agreement.

Question

Quizplus · Accepted Answer

The test usually applied in contract law is whether a party, at the time the contract was entered into, had sufficient mental capacity to understand the nature and effect of the contract. A person could be medically insane (e.g., suffering from paranoid delusions) but still have the legal capacity to contract.

Which of the Following Is a Correct Statement Regarding the Test