Question

Prompt

Ortelere, a retired teacher, has built up a substantial amount of funds in her retirement plan before she retired because of "involutional psychosis" (a form of mental illness).

She has previously specified that a lowered monthly retirement benefit would be paid to her so that her husband would get some benefit from the retirement plan if she died before he did.  After her mental problems began, she changed her payout plan and borrowed from the pension fund (....ok, lady, you're getting the money based on 'your' decision! We have relied on 'your' decision 'today'. Positions are changing, parties will be 'affected' based on 'representations'.)

As a consequence of the changes she made, her husband lost his rights to benefit. Two months after she made the changes, she died. The husband sued to reverse the changes his wife made, claiming she was not of sound mind when she made them.

• Will the changes in the plan be voided? Previously in Chapter 10 you only have the concept of 'consideration' and in chapter 11 we have 'competency'. Even if you argue competency, don't you find this very difficult to prove?
• Explain your answer. This is a good one, have some fun with this. You 'could' argue both sides, who has the stronger position?..... no free lunch, eh? Going to need an 'empathetic judge'?

Answer 1

Competancy to contract : It means mental capacity to understand nature and consequences of the agreement . Natural person over the age of majority (18) are presumed to have full legal capasity to enter intonbinding legal cotracts, But there and some individuals who have only limited capasity to contract include;

• Miniors
• Mentally incapcitated persons
• intoxicated persons
  
  Any person of sound mind can make a contract. Section 12 of the Act stipulates that a person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interest. A person, who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person, who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. It means a PMI who is currently free of the psychotic symptoms can make a contract, whereas a person who is currently intoxicated or delirious cannot make a contract.

* In the given situation she is a retired teacher and has substantial amound of fund in her retirement plan. She retired because of "involutional psychosis" (a form of mental illness). She has previously specified that a lowered monthly retirement benefit would be paid to her so that her husband would get some benefit from the retirement plan if she died before he did.  After her mental problems began, she changed her payout plan and borrowed from the pension fund (....ok, lady, you're getting the money based on 'your' decision! We have relied on 'your' decision 'today'. Positions are changing, parties will be 'affected' based on 'representations'.)
  As a consequence of the changes she made, her husband lost his rights to benefit. Two months after she made the changes, she died. The husband sued to reverse the changes his wife made, claiming she was not of sound mind when she made them.

• Any person enter into a contract should be sound minded and have ability to under stand the consiquenses . If that person is not competent to enter into a contarct then the contract should be void . she made changes to the agreement after her mental problems began.SO the changes she made will be void , athe complaint mad by her husband stands .
• (....ok, lady, you're getting the money based on 'your' decision! We have relied on 'your' decision 'today'. Positions are changing, parties will be 'affected' based on 'representations'.) the conditions are added but she would be in a condition to under stand the consequences. Her husband have the stronger position
• And the mental problem should be proven in the court

Any person who are not compent to enter in to a contract made any contract with any person the contract said to be void