First Principles of Business Law

6.5. The capacity of persons with mental disabilities

Read the facts and the question and then choose the best answer.

A says: "I am 35 years old. Over the last five years I have developed increasing symptoms of a serious mental disorder. As long as I take the prescribed medication, I am alert and can function normally. But if I forget to take my pills in the morning, I become affected by severe mood swings so that I cannot concentrate, absorb details or make proper judgments. These symptoms are not obvious to others. While off my medication last week I entered into a contract with BB Travel for an overseas holiday. Now that I am back on my medication I realise that the holiday is far more expensive that I can realistically afford. Am I bound by this contract?"

(a) Yes, in these circumstances, A is legally bound by the agreement with BB Travel.

(b) No, in these circumstances, A is not legally bound by the agreement with BB Travel.