The Case of Canadian Imperial Bank of Commerce V

question 8

Multiple Choice

The case of Canadian Imperial Bank of Commerce v. Milhomens examined the effect of one party's insanity on a contract. What did the Court find?

• A) For a contract to be voidable because of insanity, one party must be insane and the other party must have known (or ought to have known) of the insanity.
• B) If a person has the mental faculties to sign a contract, that person cannot be insane.
• C) If an insane person enters into a contract, that contract is automatically void.
• D) Contracts are not enforceable by either party if one party can establish a mental defect.
• E) The relevant test for insanity is simply whether one party believed the other to be insane at the moment the offer was made.

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