Which of the Following Is Correct About Contracts Entered into by Insane

question 62

Multiple Choice

Which of the following is correct about contracts entered into by insane persons?

• A) Contracts entered into by all insane persons are void.
• B) Contracts entered into by all insane persons are voidable.
• C) Contracts entered into by persons adjudicated insane are void, and those entered into by nonadjudicated insane persons are voidable.
• D) Contracts entered into by persons adjudicated insane are voidable, and those entered into by nonadjudicated insane persons are void.
• E) Contracts entered into by insane persons are void, but only if there is no medication that they could have taken to make them competent.

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Definitions:

Holder in Due Course

A legal term referring to a party that has acquired a negotiable instrument in good faith and for value and thus has certain protections against defenses and claims that could be asserted against the transferor.

Personal Defenses

Legal arguments or claims that an individual can use personally to avoid enforcement of a contract or legal obligation against them.

Contractual Defenses

Legal arguments that can be used to challenge the enforceability of a contract.

Promissory Note

A financial document in which one party promises to pay another party a specific sum of money on a specified date or on demand.