In Mouralian v. Groleau (Ont CA, 2024) the Ontario Court of Appeal comments on mental incompetence and contract formation:
[16] The motion judge concluded, at para. 26:
In any event, it is clear that the defendant had no knowledge of any alleged incapacity of the plaintiff at the time the APS was signed. “Even in cases of mental incompetence, a party seeking to escape the terms of a contract must show not only that he or she was mentally incompetent, but also that the other party knew it” or at least was aware of facts that should have put them on notice that the state of mind of the mentally incompetent person was in question: Lougheed v. Ponomareva, 2013 ONSC 4347, at paras. 43-44; Grant v. Imperial Trust Co., 1935 CanLII 335 (SCC), [1934] O.W.N. 370 (C.A.); aff’d 1935 CanLII 327 (SCC), [1935] 3 D.L.R. 660 (S.C.C.).
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