Also known as: mental competence to contract · contractual capacity · mental capacity
Written by attorneys · grounded in primary & secondary sources — see below
The mental capacity of a person to understand and appreciate the nature and consequences of a particular transaction or agreement. Capacity is measured at the moment the act occurs and is lacking when a court has imposed guardianship over the relevant decisions or when intoxication or other impairment prevents comprehension of the act.
Melanie Morris, recovering from surgery and taking strong pain medication, signed an irrevocable assignment transferring her entire investment portfolio to a hedge fund. Her spouse had no independent income and relied on her support. The assignment is invalid because she lacked the mental capacity to understand its effect on her future financial security and that of her dependent spouse.
Megan Moore spent the afternoon drinking hard cider and smoking marijuana before a stage wedding ceremony. During the ceremony she was visibly intoxicated, laughed inappropriately, and required repeated prompting to recite her lines. The marriage is invalid because she lacked mental capacity to understand her actions and agree to them at the time of the ceremony.
Select any source to read its text and confirm it supports the definition.
Meredith Maxwell executed an irrevocable deed transferring an income-producing apartment building while residing in assisted living and relying on rental income for support. She occasionally confused family members and tenants during the signing session. The deed is invalid because she lacked both the capacity to make a will and the additional understanding of the gift's effect on her financial security.
Matthew Martinez, subject to a court-ordered financial guardianship, signed a twenty-year rooftop lease and power purchase agreement presented by a solar company. His guardian had not approved the transaction. The agreement is not enforceable against him because the guardianship adjudication removed his legal capacity to incur contractual duties in that domain.
A court-appointed guardianship for financial or property decisions removes the ward's legal capacity to incur contractual duties in the covered area. Any contract signed solely by the ward is at most voidable at the guardian's election rather than automatically void.
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Capacity is determined at the precise moment of the ceremony. Visible intoxication or drug impairment that prevents understanding the legal act renders the marriage invalid even if the party appeared coherent earlier in the day.
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The donor must possess the mental capacity necessary to make or revoke a will and must also understand the effect the gift may have on the donor's future financial security and on anyone dependent on the donor.
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No. Once a court has imposed guardianship over financial or property decisions, the ward lacks legal capacity regardless of momentary lucidity or apparent understanding of the particular document.
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…or that he was subject to an irresistible impulse by reason of derangement. The court said that while the burden of proof on mental capacity is upon the Government once some testimony as to the defendant's mental state is adduced, there was no testimony concerning Durham's mental state as of July 13, 1951, and therefore the…