Brief Fact Summary. Plaintiff Darwin Cundick agreed by written contract to sell all of his ranching properties to Defendant J.R. Broadbent. The agreement was once amended in a manner favorable to Plaintiff. Plaintiff, through his wife, who had been appointed his guardian ad litem, sued to set aside the agreement on the ground that Plaintiff was mentally incompetent to contract.
Synopsis of Rule of Law. Absent fraud or knowledge by one contracting party of a mental deficiency on the part of the other contracting party, the agreement is voidable by the deficient party in accordance with equitable principles.
Issue. Can Plaintiff rescind the contract for reason of mental infirmity?
Held. No. A contract is voidable, in accordance with certain equitable principles, at the option of a person suffering from a mental deficiency. A person possesses mental capacity to contract where he has sufficient reason to enable him to understand the nature and effect of the act in issue. In the present case, there is not evidence of overreaching or fraud on the part of Defendant, and while there is some evidence of a change in the conduct of Plaintiff’s business affairs, the record lacked any evidence that his family and friends noticed a deficient mental condition. Specifically, Plaintiff’s wife noticed nothing about his mental condition in participating with him in the months-long transaction.
Dissent. The majority relies on trivial evidence. Of more relevance is the undisputed medical testimony, which tended to prove that Plaintiff did not have the capacity to contract at the time of the contract. Further, the nature of the transaction proves lack of capacity.
Discussion. Mental incompetence at the time of contracting (a factual question) creates a contract that is voidable at the incompetent party’s option.