Mental Capacity to Contract

The video tutorial explains the concept of mental capacity in contract law, highlighting that individuals must understand the nature of agreements they enter into. It identifies groups lacking this capacity, such as minors, mentally incompetent individuals, and those temporarily incapacitated, like intoxicated persons. Contracts with such individuals are voidable, meaning they can be invalidated if the individual regains capacity or decides against the contract. Understanding mental capacity is crucial for ensuring valid and enforceable contracts.

What is required for an individual to enter into a valid contract?

• Financial stability

• Social status

• Mental capacity

• Physical strength

Which group is generally considered to lack the mental capacity to enter into contracts?

• College graduates

• Minors under 18

• Adults over 18

• Employed individuals

Which of the following is an example of someone who might temporarily lack mental capacity?

• A person who is reading

• A person who is asleep

• A person who is intoxicated

• A person who is exercising

What can happen to a contract if an individual regains mental capacity and decides not to be part of it?

• It is transferred to another person

• It is automatically renewed

• It can be voided

• It becomes a permanent contract

Why is mental capacity important in understanding contracts?

• It allows for faster contract processing

• It helps in negotiating better terms

• It ensures understanding of the contract's nature and consequences

• It guarantees financial benefits