A man named Bob Smith believes that he is Santa Claus (who delivers presents to

Question

A man named Bob Smith believes that he is Santa Claus (who delivers presents to all the children around the world on Christmas Eve). In fact, he is not Santa, but he has believed this for many years. He signs his name "Santa." He signs many contracts as "Santa," and he refers to his wife as "Mrs. Claus" even though her name is actually Betty Smith. She puts up with it, because he really does believe he is Santa, and because she loves him and because his wages from his job at Hasbro toys pays the bills. One day he enters a contract with your company to hire you to build him a gigantic workshop in his backyard so he can build his toys and stable his "eight tiny reindeer." In return he will pay you $120,000 for the construction. When his wife learns of this deal, she tries to reject it because it is voidable due to his lack of contractual capacity. Was this contract voidable, or valid and enforceable? Fully explain your answer.

Explanation / Answer

The condition of Bob Smith suggest that he is incapacitated due to his delusion that he is Santa Claus, and out of his delusion may be that he has signed the contract. Hence, this is a voidable contract. However,his wife needs to prove Bob's incapacity to understand the true nature of the contract that he has signed and entered into.

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