Heights Realty, Ltd. v. Phillips

Heights Realty, Ltd. (plaintiff) had an exclusive listing contract with 84-year-old Johnye Gholson to sell her property, later amended to raise the down payment. When an offer came in that Gholson did not accept, Heights Realty sued for its commission. During the proceedings Gholson was adjudicated incompetent, and her son-in-law Phillips (defendant) defended on the ground she lacked capacity when she signed. The trial court held the contract invalid.

Whether a contracting party's mental incapacity at the time of contract formation may void the contract.