Also known as:powers of avoidance · right of avoidance · avoidance power
Written by attorneys · grounded in primary & secondary sources — see below
A legal right allowing a party who lacked contractual capacity due to mental illness or defect to disaffirm an otherwise binding agreement. Where the contract is made on fair terms and the other party is without knowledge of the mental illness or defect, the power of avoidance terminates to the extent that the contract has been performed in whole or in part or the circumstances have so changed that avoidance would be unjust.
Sources & Authorities
How it applies
Common Examples
2
Performance Cuts Off Avoidance
Pearl Porter, an elderly woman under temporary guardianship for cognitive decline, signed a below-market purchase option with Platinum Partners at her kitchen table. Platinum Partners had no knowledge of her condition and the terms were fair. After Platinum Partners customized and installed specialized equipment in reliance on the deal, Pearl sent written notice attempting to cancel. A court holds that her power of avoidance has terminated because avoidance would now be unjust.
Delay Bars Avoidance After Duress
Pearl Porter, an elderly woman under temporary guardianship for cognitive decline, signed a contract with Platinum Partners. After the guardianship ended, Pearl retained benefits received under the agreement for several months without manifesting any intent to avoid. When she later sought to disaffirm, a court rules that her power of avoidance is lost because she acted inconsistently with disaffirmance by retaining the benefits.
Put it into practice
Test Yourself
10
Practice Questions5
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Cases
Restatements
Casebooks
Hornbooks
Study Supplements
Gengaro v. City of New Haven984 A.2d 1133 (Conn. App. 2009)
Common questions
Frequently Asked
3
What is the legal effect of a contract entered by a party with mental incapacity?+
The contract creates only voidable duties. The incapacitated party holds a power of avoidance that allows disaffirmance unless the power has terminated under the rules protecting innocent counterparties who performed on fair terms without knowledge of the defect.
Supporting sources
When does the power of avoidance terminate after partial performance?+
The power terminates to the extent the contract has been performed in whole or in part when the agreement was made on fair terms and the other party lacked knowledge of the mental illness or defect. A court may then grant relief as justice requires rather than permitting full avoidance.
Supporting sources
Does a minor's contract remain fully binding if the minor later disaffirms?+
No. A minor's contract is voidable at the minor's option. Disaffirmance renders the duties unenforceable against the minor, though restitution may still be available for benefits already received.
Supporting sources
ContractsDefenses to enforceability · Incapacity to contractUBEFoundational