Which of the following is false regarding mental incompetency?

Multiple Choice

Generally, a person lacks capacity because of mental illness or defect if they are unable to understand the nature and consequences of the contract.

Generally, a person lacks capacity because of mental illness or defect if they are unable to act in a reasonable manner related to the transaction and the other party has reason to know of that condition.

In a majority of states, contracts made by an incompetent are void.

Mental incompetents are treated as having limited capacity to contract.