Mental Disability

The law also provides protection for those who make contracts while under some mental disability. There are, of course, degrees of mental disability, unlike the position in relation to minors, where the person is either under 18 or over 18. English contract law recognises three categories. First, there are those whose mental state is such that their affairs are under the control of the court, by virtue of the Mental Capacity Act 2005. Since the court effectively takes over the individual’s power to make contracts, any contracts purported to be made personally by the individual will be unenforceable against him or her. Secondly, there are those whose mental state is such that, although they are not under the control of the court, they are unable to appreciate the nature of the transaction they are entering into. Contracts made by people in such a condition will be enforceable against them (even if the contract may in some sense be regarded as ‘unfair’), unless it is proved that the other party was aware of the incapacity. This was the view taken in Imperial Loan Co v Stoned In New Zealand, some authorities suggested that contract with such people might be unenforceable, even if the other party was unaware of the disability, if the contract could said to be ‘unfair’. This line of authority was rejected by the Privy Council in Hart v O’Connor. It was there held that Imperial Loan Co Ltd v Stone still represented the true position under the common law. In other words, for the agreement to be set aside on the basis of the mental disability, it must be shown that this disability was apparent to the other party at the time of the contract. Lord Brightman summed up the position as follows:

... the validity of a contract entered into by a lunatic [sic] who is ostensibly sane is to be judged by the same standards as a contract made by a person of sound mind, and is not voidable by the lunatic or his representatives by reason of ‘unfairness’ unless such unfairness amounts to equitable fraud which would have enabled the complaining party to avoid the contract even if he had been sane.

The third category consists of those people who are capable of understanding the transaction, but who are, as a result of some mental disability, more susceptible to entering into a disadvantageous contract. Contracts made by such people are binding, unless affected by the rules relating to ‘undue influence’.

The only exception to the above rules relates to contracts for necessaries. The Mental Capacity Act 2005 applies the same rule to contracts for necessary goods and services as the SGA 1979 applies to minors. Thus, a person who lacks capacity to contract for the supply of such goods and services must pay a reasonable price for them if they are supplied. ‘Necessary’ means suitable to a person’s condition in life and to his or her actual requirements at the time when the goods or services are supplied. These rules will apply to people in both of the first two categories listed above.

Intoxication

Those who as a result of drunkenness, whether voluntary or involuntary, are ‘incompetent to contract’ are, by virtue of s 3 of the SGA 1979, liable to pay a reasonable price for necessary goods ‘sold and delivered’. ‘Incompetent to contract’ presumably means ‘unable to understand the nature of the transaction’. Beyond this, there appears to be little authority on contracts made by those who are intoxicated. It is assumed, however, that similar rules apply as in the case of incapacity through mental disability. This means, amongst other things, that, in contrast to the position in relation to minors, there must be an awareness of the incapacity on the part of the other party before the contract will be unenforceable.

Such cases as there are on this topic are concerned with intoxication through the consumption of alcohol. There seems no reason why the same rules should not apply to a person who is incapacitated through drug taking.

Дата добавления: 2015-10-30