Arthur had been adjudicated insane.During his period of insanity,Arthur sold some unimproved real estate to Katrina for $5,000,its fair value.Katrina did not know that Arthur was insane.In fact,he acted perfectly normal in every way.Arthur spends this $5,000.Arthur's guardian learns of this transaction and sues to void the contract and recover the land.What results?

Question

Quizplus · Accepted Answer

Even though Katrina did not know of Arthur's insanity, the contract can be voided because Arthur was adjudicated insane at the time of the transaction. As a result, the contract is voidable and the guardian can recover the land. However, because Katrina acted in good faith, she is entitled to be reimbursed for the $5,000 she paid for the land. Therefore, Arthur must pay Katrina the $5,000.

Arthur Had Been Adjudicated Insane