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CHAPTER 14

Incapacity

§14.1 THE SCOPE AND FOCUS OF THE DOCTRINES DISCUSSED IN THIS CHAPTER

The law generally assumes that all persons have the capacity to enter contracts. The two exceptions to this rule are minors and mentally incompetent adults. A minor’s lack of contractual capacity is relatively easy to establish because it is largely based on the objective criterion of age. The determination that an adult lacks contractual capacity is more complex because it requires proof of mental illness or disturbance sufficiently serious to render the person incompetent. Although mental incapacity is necessarily based on the party’s subjective state of mind, her mental condition is proved by objective evidence of her behavior observed by others, and by expert psychiatric evidence.

  There are connections between incapacity and the doctrines discussed in Chapter 13, but there are also notable differences. The underlying rationale for permitting the avoidance of a contract entered into by a person who lacks mental capacity is the protection of the incapacitated person. This suggests analogies both to improper bargaining and public policy. However, there are important distinctions.

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