A release is a contractual agreement by which one party agrees to relinquish a claim or right under law to another against whom such claim or right is enforceable.  The right or claim given up in a release ordinarily involves contracts.  Since a release is a contract, it is subject to the same validity requirements as a contract [i].  The contractual capacity is the minimum mental capacity required by law for a party to enter into a contractual agreement and to be bound by it.  A voluntary release obtained in exchange for valuable consideration from an individual who is capable of understanding its legal effect is valid.

The common law recognizes three classes of persons who are generally considered not to have sufficient capacity to be bound by their contracts.  They are:

• minors;
• mentally Impaired or Incompetent Persons; and
• intoxicated persons.

Contracts entered into by minors are generally voidable by the minor.  Contracts entered into by persons who are, at the time of contracting, intoxicated or mentally incompetent are voidable.  Intoxication includes voluntary intoxication.  A void contract is unenforceable on its face.  However, a voidable contract is presumed to be enforceable but for the presence of some factor.  Contractual capacity is such a factor.  A party lacking capacity can avoid his/ her contractual obligations.

The term disability with respect to an individual means “a physical or mental impairment that substantially limits one or more major life activities of such individual”[ii].  It includes mere perception that someone is disabled.

A contract executed by a person without the requisite mental capacity can be ratified expressly or by implication after that person is restored to mental capacity[iii].

The requisite degree of mental capacity can be defined in two alternative ways.  A contract is subject to cancellation:

• when a person executing the contract was entirely without understanding of the contract; or
• when s/he lacks a full and clear understanding of the nature and consequences of the contract[iv].

Where an act is done by one incapable because of mental incapacity, that act can be ratified thereafter.  Ratification can be express or by implication.  A minor who arrives at majority must within a reasonable time disclaim his/her act.  S/he can upon majority immediately expressly ratify his/her act, at which time it becomes binding.  Additionally, s/he can by lapse of time, with knowledge of the act can ratify by implication.  Additionally, a mentally incapable person who made a release at the time of incapacity can expressly, after being restored to mental capacity, ratify the act.  S/he can by lapse of time after restoration of mental capacity, sound mind, by implication ratify an act[v].  Ratification can be implied from the acts or from the silence of the party[vi].

The burden of showing that s/he lacked the necessary mental capacity at the time of execution of the release is upon the releasing person[vii].  Not all disabilities and not all psychiatric disabilities inherently involve a question about capacity to act knowingly and voluntarily[viii].

Moreover, in ratifying a minor’s act, a person claiming tort damages on behalf of the minor against another person has the power to execute a release on behalf of the minor.  In ratifying a minor’s release, it must be approved by the court.  When a person on behalf of a minor ratifies a release, such a release is binding on the minor.

[i] Erck v. Bachand, 69 S.D. 330, 335 (S.D. 1943).

[ii] 42 USCS § 12102.

[iii] Hogue v. Southern R. Co., 390 U.S. 516, 518 (U.S. 1968).

[iv] Joiner v. Joiner, 225 Ga. 699, 702 (Ga. 1969).

[v] Brown v. Carmichael, 152 Ga. 353, 354 (Ga. 1921).

[vi] Strickland v. Parlin & Orendorf Co., 118 Ga. 213, 218 (Ga. 1903).

[vii] Barlow v. Strange, 120 Ga. 1015, 1017 (Ga. 1904).

[viii] United States v. Schneider, 111 F.3d 197 (1st Cir. R.I. 1997).