Mental Capacity to Contract

If you know someone who is thinking about entering in a contract, or if you want to contract, then it is crucial for you to know that mental capacity to contract is a crucial feature of the contract law. Therefore, if you are looking for someone to help in assessing your mental capacity to contract, then you should contact Mental Capacity Assess.

What is meant by the mental capacity to contract?

Mental capacity can be defined as the level of understanding of a person. The mental capacity to contract refers to the understanding of a person about their rights and obligations, and the effects of a contract. If the person is not able to understand these factors, then he or she lacks the mental capacity to contract.

What is the case law for mental capacity assessment to contract?

Since the Mental Capacity Act 2005 does not cover the mental capacity to contract, therefore people in the UK can rely on case law to determine the capacity of a person to contract.

The case law to assess the mental capacity of individual to a contract is Fehily v Atkin. In this case, an individual had entered into an agreement, which did not succeed. The Court had to determine whether or not the person had the mental capacity to contract.

The case was decided against the person as he lacked the mental capacity, and there was insufficient medical evidence that could make his case strong. Therefore, the High Court laid down certain points that must be considered when assessing the mental capacity of an individual to contract.

How to assess the mental capacity to contract?

The following things must be considered when assessing the mental capacity of a person to contract:

• An individual must have the mental capacity to know the issues that need to be addressed so that he or she can obtain information for reaching a decision.
• The person should be capable enough to reach a certain type of decision.
  The person should have the mental capacity to understand the transaction.
• The mental capacity to understand a transaction must be determined in relation to when the transaction was being made.
• An individual must have the mental capacity to understand that he or she will need the advice to understand a transaction.
• The person must be able to understand the main points of the transaction.
  

Why is it important to assess the mental capacity to contract?

The mental capacity to contract is an incredibly important thing to consider before thinking about entering in a contract. In case some lacks the mental capacity to contract, then the contract will be declared void or it will stand canceled. There will be no legal value of such a contract. Therefore, it is necessary for all the individuals involved in a contract to be mentally capable to enter in a contract.

For further information on Mental Capacity Assessment to contract, you may speak to one of our professionals at Mental Capacity Assess.

References for personal use:

Fehily v Atkinson [2016] EWHC 3069 (Ch)

Mental Capacity to Contact: Everything you need to know