Mark is mentally incompetent and delights in signing documents.Henry persuades Mark to sign numerous promissory notes which he negotiates.Must Mark pay these notes if they have been held by holders in due course?
A)Mark must pay these notes since duress is not involved.
B)Mark does not have to pay these notes since he has a real defense.
C)Mark must pay these notes since there is a fraud in the inducement.
D)Mark may not pay these notes since no one could anticipate this happening.

Question

Quizplus · Accepted Answer

Mark's mental incompetency makes him incapable of understanding the consequences of his actions, and therefore he lacks capacity to enter into a contract. Therefore, any contract that he signed while in this state would be voidable, giving him a real defense against having to pay the promissory notes. However, the holders in due course can also transfer their rights to a third party who can then enforce the promissory notes against Mark. However, Mark can still defend against them by proving that the original transfer was voidable, and therefore, the transferee or holder of the note cannot qualify as a holder in due course.

Mark Is Mentally Incompetent and Delights in Signing Documents