A person of unsound mind bought an annuity from a life assurance society. The society granted the annuities in the ordinary course of its business. The contracts were challenged.
Held: The court referred to the argument that a plea of insanity would not prevail unless the other contracting party knew of it, and said: ‘We are not disposed to lay down so general a proposition, as that all executed contracts bona. fide entered into must be taken as valid, though one of the parties be of unsound mind; we think, however, that we may safely conclude, that when a person, apparently of sound mind, and not known to be otherwise, enters into a contract for the purchase of property which is fair and bona fide, and which is executed and completed, and the property, the subject-matter of the contract, has been paid for and fully enjoyed, and cannot be restored so as to put the parties in statu quo, such contract cannot afterwards be set aside, either by the alleged lunatic, or those who represent him.’
(1848) 2 Exch 487
England and Wales
Cited by:
Appeal from – Molton v Camroux CEC 2-Jan-1848
The buyer of annuities from a company was of unsound mind. The company had acted in its normal course of business.
Held: The court asked ‘whether the mere fact of unsoundness of mind, which was not apparent, is sufficient to vacate a fair . .
Cited – Archer v Cutler 1980
(New Zealand) The purchaser of land sought specific performance of the contract. The vendor and purchaser had been neighbours. The neighbour needed part of the vendor’s land for access.
Held: A contract made by a person of insufficient mental . .
Cited – Hart v O’Connor PC 22-Apr-1985
Effect of insanity on making of contract
(New Zealand) The parties disputed the effect in law of an agreement for the sale of land. The transferor had proved not to be of sound mind.
Held: The validity of a contract entered into by a lunatic who is ostensibly sane is to be judged by . .
Cited – Masterman-Lister v Brutton and Co, Jewell and Home Counties Dairies (No 1) CA 19-Dec-2002
Capacity for Litigation
The claimant appealed against dismissal of his claims. He had earlier settled a claim for damages, but now sought to re-open it, and to claim in negligence against his former solicitors, saying that he had not had sufficient mental capacity at the . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 18 December 2021; Ref: scu.252446