Question 3 (10 marks)

Washington, an insane person of limited means, entered into a contract with Lincoln for the purchase of an antique axe and a cherry tree for $100. The price paid for both of these items was fair and reasonable and, at the time the agreement was made, Washington seemed to be a normal person. Subsequently, Washington refused to take delivery of either the axe or the cherry tree, or to pay for them.

You are required to answer the following:

(a)Can a mentally unsound person enter into a contract? Explain your answer (3 marks)

(b)Was there a valid contract between Washington and Lincoln for the purchase and sale of the antique axe and cherry tree for $100? Explain your answer (7 marks)