conditions of a valid contract

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JimmyB99

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Do you need to have mental capacity to complete a contract and if so, what is the relevant date to have capacity?

Say, someone signed a contract to sell a house and a few weeks later the purchaser signed the contract and paid the purchase price, etc.? Ordinarily, the sale of the house would have an effective completion date equal to the date the purchaser signed. But, what would happen if the day before the purchaser signed the contract, the vendor had an accident and was in a coma? Is this a valid contract when on the date the contract was completed the vendor had not got capacity (if that is a reasonable description of someone in a coma?).

Any thoughts (apart from advising me to get legal advice! :) )
 
Fair point Scooby.......put it like this, many of them are inter-related and all comments (in relation to the topic!) are most welcome. There are some atypical questions for sure but the purpose is to inform a real life not academic situation and sometimes the precise facts need to be amended for confidentiality/anonymity purposes!
 
Hiya Clubman,

Thanks for looking into this. The relevant section from this link is.....

7. Capacity​

The law presumes that everyone has the capacity to contract and the onus is on the person claiming that they were incapable to prove so. If they succeed this incapacity may defeat the contract and make it unenforceable. The courts will accept three categories of incapacity. The first of these is contracts entered into by a minor. Apart from contracts for necessaries and contracts of apprenticeships, education and service the general rule is that the contract will not be binding on the minor. The second category of incapacity is insanity. In order not to be bound the person must show that owing to his mental condition he did not understand what he was doing, that the other party was aware of this incapacity and that the contract was not one for necessaries. The third category of incapacity is intoxication and there is a similar burden of proof on the person seeking to rely on it as in the case of insanity


This type of commentary is consistent with my own research attempts. If we take three grounds as set out above, then the guy in the coma may very well not be a minor, nor insane, nor intoxicated. But, but......does that mean he has got capacity whilst, literally, comatose?! :),
 
JimmyB99 said:
If we take three grounds as set out above, then the guy in the coma may very well not be a minor, nor insane, nor intoxicated. But, but......does that mean he has got capacity whilst, literally, comatose?!
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All the events required to complete a contract cannot happen simultaneously. The vendor and purchaser never sign in the same instant, the key test as I understand it is as to whether they were of sound mind when they signed.
 
Thanks Leo,

I appreciate your opinion and understand where you're coming from. I also fully accept that the way modern conveyancing is done is that there is a time delay between one party signing and then the other. This is in contrast with how things might have been done back in the day when there may have been a "signing" ceremony or something.

I know this is very legalistic stuff but what is the effective date of the contract in the circumstances described and do both parties to the contract need to have capacity on this effective day? I'll exaggerate the scenario for effect now. Imagine a vendor signed a contract and two days later he died of a heart attack and two days later again the purchaser signed the contract (not realising that the vendor was dead)? What now is the effective date of the contract and who is the contract between?! Does your argument/position still hold?
 
So who are the parties to the contract at the effective date in the last scenario described?
 
JimmyB99 said:
Leo - in the circumstances described - the Estate cannot act until probate is effective.
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I know, but they are still bound by the contract. Both parties could agree to vacate given the time that might take.
 
The purchaser always signs the contract first.

Only when the vendor signs, after the purchaser has signed, the purchaser has paid the deposit and the contracts have been exchanged, is there a binding contract.

mf1
 
Thanks MF1

So is the effective date of the contract when contracts are exchanged or when the conveyancing is completed?
 
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