Contract Basics

Oftentimes, business owners enter contracts to purchase real estate or obtain legal advice. If the other party wants out of the contract, that person might claim impairment. The ability to cancel the contract depends on the circumstances involving the signing, as well as the party's degree of mental impairment.

While contract laws vary depending upon the state, they typically require that parties be competent and not under duress. Most laws specify that if a person cannot understand the agreement, it is a sign of duress.

According to the law, contracts must have a few specific aspects, including:

  • An offer. One party must accept an offer presented by the other.
  • Agreement terms. Both parties must agree on the material terms.
  • Exchange of consideration. The parties must exchange something of value.

In addition, the agreement terms must remain clear so the court can enforce them. If a party was drunk or impaired at the time of the signing, the impaired party may not have understood what the agreement terms were.

Impairment When Signing a Contract

If a party signs but cannot understand a contract, the party can sue to void the contract. State and federal laws allow courts to decide whether or not a contract is voidable. The court must also determine if mental impairments prevent a person to agree to the contract.

If a party becomes mentally impaired after signing a contract, the contract typically remains valid. However, if the party signs a contract without an attorney to represent the business and later suffers a brain injury, the court might not make the party carry out the contract or sue for damages.

Contract Signing Under the Influence

Someone who uses drugs or alcohol could become temporarily impaired. Signing a contract while under the influence can become an issue and the contract may be voidable. It usually depends on the extent of the influence and whether the party knew what he or she was doing.

If the court determines that the contract came into existence, the drunken party must show why the contract should be voidable. The court may rule the contract voidable, allowing the impaired party to void the contract.

Preventing Impairment Claims

If you happen to sign a contract with someone who has a mental illness or developmental delay, take extra precautions to make sure the contract is valid. You can find a court-appointed guardian to sign on behalf of the impaired person. In addition, most states require at least one witness to be at the contract signing.

Statutory Requirements for a Valid Written Will

When it comes to a written will, there are four main requirements for its formation.

  • It must hold testamentary intent. This means the testator stated the document in question states his or her will at the time.
  • The testator must have testamentary capacity. This involves knowing that he or she is making the will, what the will entails, what the nature of the property is, and understanding the disposition of the assets.
  • The will must be free of fraud, duress, mistakes, or undue influence.
  • The will must go through a proper ceremony.

Many states do not require the testator sign the will at the end of the document. The signature can occur almost anywhere. The will must have the signature of a witness, who must be competent, mature enough, and have sufficient mental capacity so they can testify in court if needed.

Will Invalidation Via Fraud or Undue Influence

Will invalidation by fraud involves falsifying statements of facts whether it involves deceiving the testator or other parties. This can cause the testator to act in reliance on the false statements.

There are two different types of fraud, including fraud in the execution. This occurs when the testator is deceived about the documents he or she is signing. The other is fraud in the inducement, which happens when the testator relies upon a false representation of a material fact made by someone who knew it was false.

Undue influence means that another person's desires replace that of the testator. However, it is difficult to prove because the evidence must be substantial. Simply having a motive or ability to exert influence doesn't provide enough reason for it to happen.

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