Contracts and questionable capacity

JOHN decides to sell his home and retains a real estate agent in early December.

The property is promptly listed for sale.

The agent meets with John several times at John’s house and finds John to be quite an easy-going man.

The agent does not receive an offer on John’s house until May.

John accepts the offer and drives to the agent’s office where he signs the Contract.

The agent notices that John is quite agitated.

The signed Contract is then forwarded to a solicitor who immediately attempts to contact John to obtain instructions regarding settlement.

A week passes and the solicitor still has not been able to contact John.

The agent decides to drive out to John’s house.

When the agent pulls into the driveway, John comes storming out of his house, hurling verbal abuse and threatening to ‘bash’ him if he ever returned.

The agent promptly leaves and informs the solicitor that he would not return to John’s house without a police guard.

Unable to obtain instructions from John, his solicitor manages to track down John’s brother and asks him to contact John.

He says “No way, John’s crazy”.

The sale is not able to settle and eventually the purchasers commence action in the Supreme Court seeking an order for specific performance.

John’s solicitor is unable to represent John in the Supreme Court proceedings because he cannot obtain instructions.

The solicitor instead writes a letter to the Court, stating that John appeared to be suffering from a mental illness and that he may not have had the capacity to enter-into the Contract.

However, because John did not appear in Court and was not represented at the hearing, the Court rules that, unless there is evidence to the contrary, all adults are presumed to have capacity to enter-into contracts and makes orders for settlement of the sale to proceed.

Thank you to Jamie Visco for his assistance with this column.

Email Manny Wood, principal solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487.

This column cannot be relied upon as legal advice.

By Manny WOOD, Solicitor