Mental Illness and the Law of Contracts

The traditional and most important problem relative to mental illness and the contract is the situation created when mental illness exists at the time of agreement (the problem of contractual capacity). One principal result of mental illness at this time may be the avoidance of the contract by the mentally ill person. Since case law in this area is extensive, the major portion of the study is concerned with this problem (parts II, III and IV) and the effects of such incapacity throughout the remaining course of the contract. Mental illness occurring after agreement and at the time of performance of a party to a contract can also have important effects on the remainder of the contract, and these effects are discussed in part V. Finally, there can be a number of other effects caused by mental illness which occur after agreement but do not directly affect performance. These are discussed in part VI.