Capacity of the Mentally Ill to Conclude Contracts

Explain the law relating to the mentally ill to conclude contracts and consider why these rules exist.

Introduction

A contract is a legally binding agreement between two or more persons that is recognised by the courts. In order for an agreement to be legally binding there are certain criteria that have to be met. One of these criteria is capacity. The majority of us have the capacity to form a legally binding agreement, however certain categories of people are limited by law to make contracts the main categories are minors, people judged incapable of contracting due to mental disorders, drunkenness or under the influence of drugs.

The purpose of this essay is explain the law relating to the mentally ill to conclude contracts and consider why these rules exist.

Apart from persons certified insane under section three of the Mental Health Act 1983 (www.statutelaw.gov.uk) a contract with an individual person with mental illness is valid. Persons with mental