GettheTruch

Mentally Disabled Adult & Contracts

3 posts in this topic

I have a few questions regarding a mentally disabled adult.

I was of the impression that a mentally disabled adult, age 52 diagnosed by a physician, cannot enter into or sign documents of a legal or binding stature.  I understand and realize that there are those that are high functioning, can read and write.  However, if this individual cannot read or write, and even if you try to explain a contract to them does not mean they understand what you are explaining, how can they be held accountable for contents of the contract or document they are signing? 

 

So, if an adult as such, needed someone to be power of attorney for them they wouldn't be able to sign the document would they?  One would have to obtain conservatorship for them, correct?

 

And if such an adult was taken advantage of, to explain an account with an internet company set up in their name by someone else, wouldn't this be fraud and couldn't the contract be terminated?  Yet, when you explain this to the internet company their response is they are an adult - how can this be?

 

I need to circle back to the conservatorship.  How difficult is it to establish a conservatorship for someone?  Can it be done without an attorney or is this something that the one trying to do the conserving should involve an attorney?  And can a conservator live outside of the state of the one they are trying to conserve?  For instance if they disabled adult resides in Colorado and the responsible person resides in Texas or Idaho, and intend to have the disabled adult continue to reside in Colorado, until such time the caretaker passes or can no longer care for the disabled adult, at which time the conservator would step in and take the disabled adult to reside with them and provide for their needs. 

 

Any assistance and answers to these questions would be most appreciated.  Thank you.

 

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Every person has the capacity to enter into a contract unless they are mentally incompetent or under some legal disability (e.g. minority, etc). Colorado law starts with the presumption that every person is sane and competent to enter into a contract. Forman v. Brown, 944 P.2d 559 (Ct. App. 1996). A person can be insane or disabled for some purposes and yet still retain the capacity to contract. Id. A person is considered incompetent to contract in Colorado “when the subject matter of the contract is so connected with an insane delusion as to render the afflicted party incapable of understanding the nature and effect of the agreement or of acting rationally in the transaction.” Id. Note that incapacity to contract is an affirmative defense and the person claiming the defense bears the burden to prove the claimed mental disability is severe enough to render the person incompetent if the matter goes to court.

 

If the person simply lacked the capacity to contract then the ISP company entering into a contract with that person has not committed fraud, but does run the risk that the contract will be void or voidable based on that incapacity to contract. it may not be obvious or apparent to other parties if a person has the capacity to contract, and that presents a problem since a party is entitled to expect the contract is enforceable unless he or she has reason to know that the other party lacks the capacity contract.

 

A person commits fraud if he makes false or misleading statements to another with the intent to induce that person to part with money or property. So to make the case that the contract was voidable due to fraud the person asserting the fraud must prove that the ISP made some false or misleading statement on which he relied in deciding to enter into the contract for the internet service.

 

If a person lacks the capacity to contract, he or she also lacks the capacity to execute a will or a power of attorney in Colorado. Thus, if you want to be able to take over handling this other person’s affairs and that person is not mentally competent to contract, a conservatorship would indeed be necessary. That requires petitioning the district court for the conservatorship. In that proceeding, the disabled person would have first be declared mentally incompetent to manage his affairs, which will require testimony from a medical expert on mental capacity to testify as what the person can and cannot do. If the court finds the person is incompetent, then the court will move to determine who should be appointed conservator for the incompetent person. Whether it is appropriate for the conservator to be out-of-state is something that the court would decide based on the needs of the incompetent person.

 

This is not exactly an easy or inexpensive process. I would recommend you have an attorney representing you should you wish to seek conservatorship over this other person and the other person would also have an attorney representing his interests in the proceeding as well.

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14 hours ago, GettheTruch said:

I was of the impression that a mentally disabled adult, age 52 diagnosed by a physician, cannot enter into or sign documents of a legal or binding stature.

 

Not true -- at least not as phrased.  "Mentally disabled" does not necessarily mean a lack of capacity to contract.

 

 

14 hours ago, GettheTruch said:

if this individual cannot read or write, and even if you try to explain a contract to them does not mean they understand what you are explaining, how can they be held accountable for contents of the contract or document they are signing?

 

Generally, such a person would lack the capacity to contract.

 

 

14 hours ago, GettheTruch said:

So, if an adult as such, needed someone to be power of attorney for them they wouldn't be able to sign the document would they?  One would have to obtain conservatorship for them, correct?

 

A person cannot "be power of attorney for" another person.  A power of attorney ("POA") is a document, and power of attorney is an abstract concept.  That said, a person without capacity to contract would also not have capacity to sign a POA, and yes, in such a situation, a conservatorship would be needed to create the situation that a POA would create.

 

 

14 hours ago, GettheTruch said:

And if such an adult was taken advantage of, to explain an account with an internet company set up in their name by someone else, wouldn't this be fraud and couldn't the contract be terminated?

 

It's not really clear what sort of situation you're talking about, but it wouldn't likely be fraud.  Rather, a contract involving a person without capacity to contract would be deemed void (which is different than termination).

 

 

14 hours ago, GettheTruch said:

Yet, when you explain this to the internet company their response is they are an adult - how can this be?

 

I'm not sure who "you" is in this sentence, and it sounds like you're talking about a very specific situation as if it were a hypothetical situation.  That being said, the average customer service rep doesn't understand or really care about legal concepts like capacity to contract.

 

 

14 hours ago, GettheTruch said:

How difficult is it to establish a conservatorship for someone?

 

I'm not sure what sort of meaningful answer could be given to this question.  In my view, in the abstract, it's not particularly difficult, but the relevant facts matter and you have provided none.

 

 

14 hours ago, GettheTruch said:

Can it be done without an attorney or is this something that the one trying to do the conserving should involve an attorney?

 

It can be done without an attorney, but, in my opinion, it's not a good DIY project because it would take the average non-lawyer an inordinate amount of time to figure out the process.

 

 

14 hours ago, GettheTruch said:

And can a conservator live outside of the state of the one they are trying to conserve?

 

I don't know if Colorado has any law that requires the conservator to live in the same state as the conservatee, but it obviously would be better and more efficient if that were the case.

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