Can a release be binding on a person of unsound mind even if they did not understand the meaning of the release?

Ontario, Canada


The following excerpt is from Walkinshaw v. Complex Services, 2010 HRTO 2318 (CanLII):

There was nothing in the evidence that would have given the three representatives of the respondent who attended the meeting any reason to question her legal capacity to sign the release. As the respondent notes, case law suggests that a contract is binding on a person of unsound mind even if that person did not understand its meaning, unless the other party had knowledge, actual or constructive, of the incapacity. See Bjelakovic v. Accenture Global Services, [2008] O.J. NO. 2660 (On. S.C.). Here, there had been no request for accommodation, and as outlined above, the three men conducting the termination meeting were not privy to any knowledge or details of the applicant’s disability. Despite her disability, I find on the balance of probabilities that the applicant had a general understanding of what was happening at the meeting and thus grasped that she was signing documents that signified acceptance of a severance package. The applicant has not established that she did not have the legal capacity to sign those documents. Other issues

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