CLEP Business Law

Answer: B. If a conservator has been previously appointed to make financial decisions for a mentally incompetent person, then a contract that person enters into is void. On the other hand, if no prior adjudication of incompetence has been made, then the contract is voidable. A court will make a determination of the party's competence at the time he or she entered into the arrangement. Under this circumstance, the court may find that the party was competent and that the contract is enforceable.