Posted: July 18th, 2022

Contract Scenario
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Did he (Calvin) have the mental capacity to enter into the contract when he agreed to let Billy sell the penny?
Before entering into any legal contract, certain requirements have to be met. First, there should be at least two parties agreeing to enter into the contract, and both of them should have the mental capacity to agree (Black, 2008). In other words, each party to a contract has to understand what they are entering into and all the consequences associated with their action. Black (2008) adds that if one of the parties to a contract lacks this capacity and end up signing the agreement, such a contract can be voided. Among the several conditions that determine any party’s capacity to enter into any legal agreement is the mental defect or illness of one of the parties to a specific contract. Although this clause was traditionally intended to protect persons that were developmentally insane or disabled, today, it is being applied to include people suffering from various forms of degenerative diseases like stroke or Alzheimer’s, limiting their cognitive ability (Marson & Ferris, 2018). Based on this understanding, we can argue that Calvin didn’t have the mental capacity to enter into the contract when he agreed to let Billy sell the penny.
What would he (Calvin) have to prove to show a court that he did not have the necessary mental capacity when he authorized Billy to sell the penny?
Calvin shows a court that he did not have the necessary mental capacity when he authorized Billy to sell the penny by submitting his health records since august 2017. Calvin had suffered a serious stroke that had left him unable to walk or speak, although he was expected to recover gradually after intense therapy. The fact that Calvin was unable to coordinate his speech or movement is a demonstration that the stroke had left him with limited mental capacity. Given that he didn’t have any spouse or children act on his behalf complicated the situation. As such, Calvin can submit his health records showing that he had suffered from a stroke, which had limited his cognitive ability to enter into any binding contract with Billy.
Did Billy exert undue influence over Calvin to cause Calvin to enter into the contract that allowed Billy to sell the penny?
Billy suggested that Calvin should sell his Lincoln copper penny to use the proceeds to settle his medical bills. Although Calvin initially resisted this idea, Billy kept urging Calvin to sell the penny because it would help him avoid worrying about his medical bills. Although Calvin was a bit confused on how such a sale would occur, Billy managed to convince him that the sale would be made at the best price. Based on this understanding, it is quite evident that Billy took advantage of Calvin’s situation to exert undue influence to cause Calvin to enter into the contract that allowed Billy to sell the penny.
What do you think? Does Calvin have a case to set aside the contract with Billy on either of these theories?
From the preceding, Calvin has a case to void the contract with Billy because he couldn’t enter any legal agreement given his health condition, which has the potential to limit his cognitive ability. Moreover, given that he didn’t have any spouse or children act on his behalf complicated the situation. Finally, Billy took advantage of Calvin’s situation to exert undue influence to cause Calvin to enter the contract. Based on this understanding, Calvin has a case to void the contract with Billy.

References
Black, L. (2008). Mental Capacity and Contracts. AMA Journal of Ethics, 10(3), 161-164. https://doi.org/10.1001/virtualmentor.2008.10.3.hlaw1-0803
Marson, J., & Ferris, K. (2018). 7. Contracts, contractual capacity, mistake, misrepresentation, and duress. Business Law. https://doi.org/10.1093/he/9780198766285.003.0007

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