The vendor sought to enforce a contract. The court had rejected the defendant’s plea first that the vendor knew of his incapacity, and that therefore the contract was void, and that second, the contract should not be enforced in equity because of his incapacity.
Held: The appeal failed. The contract was valid at law because the vendor was unaware of the unsoundness of mind. The contract was not impeachable in equity because the purchaser failed to establish any of the four circumstances on which he relied in order to establish the plea in equity.
Sargant LJ discussed three issues: first, was there a concluded contract apart from lunacy; if so, secondly, was that contract enforceable at law; ‘thirdly, if it was enforceable at law, was there any case for saying that equity would restrain the enforcement of the contract that is to say, is the case one in which, prior to the Judicature Act, a bill would have lain for an injunction to prevent the plaintiff from enforcing his remedies at law?’ There was plainly a concluded contract. In dealing with the second question, whether the contract was enforceable at law, which he held it was, he added:- ‘It is possible a question may arise in some future case, with which we have not to deal at present, whether, in the case of a contract which is not a reasonable one and which is made by an insane person that contract can be enforced, the other person not knowing of the insanity. I have looked through a number of cases and I have not found a single case in which a contract has in fact been binding except where the contract was an ordinary reasonable contract. I do not in any way want to attempt to express my own view on that point because the point has not been argued before us. I only want to guard myself by saying that my mind is entirely open on the question whether the fairness of the bargain is an essential element to the enforceability of the bargain against a person who was in fact a lunatic although not known to be such by the other contracting party.’ As to the third point, the plea in equity, it failed.
Judges:
Sargant LJ
Citations:
(1925) 134 LT Rep 36
Jurisdiction:
England and Wales
Citing:
Appeal from – York Glass Co Ltd v Jubb 1924
The defendant denied liability under contract, after the vendor brought an action against against the committee of his estate as a person of unsound mind. He said that the fact that he was of unsound mind was known to vendor, and later that the . .
Cited by:
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 . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 08 April 2022; Ref: scu.252449