Maryland Home Improvement PSI Practice Exam

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

1. The person must obtain prior written approval by a licensed psychiatrist or psychologist.

2. The person must be capable of understanding the transaction.

3. The person appointed by the court to act for the disabled person must contract on his or her behalf.

4. The person may enter a contract under any conditions, because the law prohibits discrimination against persons with disabilities.

The correct answer is: The person appointed by the court to act for the disabled person must contract on his or her behalf.

In cases involving individuals who have been declared incompetent by a judge, any legal transactions or contracts they wish to enter into must be managed by an appointed representative. This is because the law recognizes that a person deemed incompetent lacks the capacity to understand the nature and consequences of their actions when it comes to contractual agreements. Therefore, a guardian or other court-appointed individual steps in to ensure that decisions are made in the best interest of the disabled person, protecting their rights and well-being. While understanding the transaction is essential for forming a valid contract, a person declared incompetent is not typically recognized by law to have such capability. The law also aims to protect vulnerable individuals, which is why it does not allow them to unilaterally enter into contracts without suitable representation. As for the notion of discrimination, while laws indeed protect individuals with disabilities, they do not invalidate the requirement for competency in contract formation. Therefore, the necessity for a court-appointed representative to act on behalf of someone declared incompetent is the legal framework that ensures competent and fair representation in transactional agreements.