Is a contract made by a mentally incompetent person voidable and set aside?

New Brunswick, Canada


The following excerpt is from Smith v Smith, 2013 NBQB 392 (CanLII):

In Pickering v. Pickering [1985] S.J. No. 338, Maurice, J. comments at paragraph 2: 2 A contract made by a mentally incompetent person not so found by prior judicial determination is voidable and will be set aside if the other party knows of his deficiency; or, if the other party is unaware of his deficiency, the contract is unfair to him (Wilson v. The King, 1938 CanLII 30 (SCC), [1938] 3 D.L.R. 433 [S.C.C.]). A person is, in law, mentally incompetent when he is by reason of his mental state unable to understand the nature and effect of the contract.

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