Online Reporter
Trust Maanda
Legal Position
IN order for a contract to bind, parties must have mental capacity.
A contract entered into by a lunatic is not valid or binding. This is so because the law requires that the agreement be based on consent of the parties.
If there is no consent due to lack of mental capacity, the contract is void. No rights flow from it.
The law relating to whether a person has the mental capacity to contract is now settled.
It was captured in Executive Hotel (Pvt) Ltd v Bennett NO supra where the court quoted with approval the remarks in Pheasant v Warne 1922 AD 481 at p 488 where it was held that:
“… a court of law called upon to decide a question of contractual liability depending upon mental capacity must determine whether the person concerned was or was not at the time capable of managing the particular affair in question – that is to say whether his mind was such that he could understand and appreciate the transaction into which he purported to enter.”
The court must assess if the mental capacity was lacking at the time of the signing of the contract. This is so because if a lunatic does an act, the presumption is that the act is void, but if it can be shown that he or she did it during a lucid interval, it will be valid.
A lunatic can have a lucid period, and if he or she contracts during that period, the contract is binding.
The tests, as determined in case law, to be considered in determining the existence or otherwise of mental capacity as follows:
Was the state of mind of the party whose capacity is at issue such that he was incapable of appreciating what was or what was not a fair and beneficial bargain?
Was the state of mind of the party to the contract, whose capacity is at issue such as would in common honesty not make him liable or responsible for such act or contract? And,
Was the contracting party whose capacity is at issue of such unsound mind as to be incapable of understanding and appreciating the transaction into which he purported to enter.
This is the test which, with slight variations of wording, has been applied in most of the cases. But it is not exclusive of other tests.
The test is to determine whether there was consensus, which is a necessary ingredient for a contract. The fundamental question is whether there was consensus, and where there is no consensus, the drastic result is that the contract is void ab initio, meaning it is void from the start.
It follows that where mental capacity is absent, no consequences flow from the purported contract. This is for the reason that where capacity to contract is lacking, the resultant transaction is void for that reason. Every act of a lunatic is null and void because it is done by a person deprived of reason.
The onus of proving that a transaction is invalid for lack of mental capacity rests on the party alleging it.
The inquiry into the mental state of a contracting party is a matter of fact that the court should decide.
There must be evidence to prove that lack of capacity. A doctor’s report must be must be based on his own examination, not on what the patient tells him.
In Hindoga v Predictive Maintenance (Pvt) Ltd &Anor 2000 (2) ZLR 109 (SC) a litigant relied upon the contents of a doctor’s report for the contention that he was mentally incompetent at the time the sale agreement was concluded. The report was held to be not enough to support that he was mentally incompetent.
In addition, the report was not found to be helpful. It was compiled two years from the date of the signing of the agreement and was based on what the patient told the doctor.
There was no other source of information to assist the doctor in assessing the mental condition.
In the court’s view, a more thorough investigation was necessary, like the patient’s medical records should have been checked.
In Chatambudza v Murape SC 45/20, a party sold a house to the other and wanted to escape from her obligation on the grounds that she was mentally incompetent at the time of the sale.
The court dismissed her argument.
There was no evidence to suggest that the seller had no idea of what a fair and beneficial bargain would be.
It was incumbent upon the appellant to demonstrate that she did not have the capacity to estimate what a fair and beneficial bargain would have been in the circumstances.
Trust Maanda is a legal practitioner and a partner at Maunga Maanda And Associates. He writes in his personal capacity. He can be contacted on +263772432646.
