6. Mental health and capacity to contract in Scotland
A client is considered legally competent to enter into a contract with a creditor if they are shown as having ‘the capacity to contract’. ‘The capacity to contract’ is defined as the client being of sound mind. For legally binding agreements, a client may not have the capacity to enter into an agreement for a number of reasons including being underage, mentally impaired or intoxicated.
In Scotland, the definition of incapacity, in relation to when a person cannot make decisions on their own behalf, is contained in Part 1, section 1(6) of the Adults with Incapacity (Scotland) Act 2000.