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A property manager orally agrees to manage an owner's three units while the owner is in drug rehabilitation. The contract is

Rationale

The contract is unenforceable in a court of law.

The oral agreement between the property manager and the owner lacks the necessary legal enforceability due to the owner’s impaired mental state while in drug rehabilitation. Contracts made under such conditions are generally considered unenforceable because they do not meet the standard of mutual consent.

A (voidable because the owner was not of sound mind.) YOUR ANSWER

While it is true that the owner may have been unable to fully comprehend the implications of the contract due to their condition, this choice suggests that the contract could be voidable at the owner's discretion. However, the nature of the agreement is actually unenforceable in a court of law due to the lack of sound judgment during its formation.

B (void because the contract was not written.) YOUR ANSWER

This option implies that the absence of a written contract renders it void. However, not all contracts must be in writing to be valid; many oral contracts are enforceable unless specifically required to be in writing by law. In this case, the enforceability issue arises from the owner’s mental state, not the contract's written form.

C (unenforceable in a court of law) CORRECT

This choice accurately describes the contract's legal status. Due to the owner's compromised mental state from drug rehabilitation, the contract lacks enforceability in a court. Courts will not enforce agreements where one party is unable to understand the terms or implications due to mental incapacity.

D (enforceable under the statute of frauds.) YOUR ANSWER

The statute of frauds requires certain types of contracts to be in writing to be enforceable, such as those involving real estate transactions. Since this oral agreement does not meet those criteria and is also affected by the owner's mental state, it is not enforceable under this statute.

Conclusion

In summary, the oral agreement between the property manager and the owner is deemed unenforceable in a court of law due to the owner's lack of sound mind during the drug rehabilitation period. While the contract's written form and the owner’s capacity are critical considerations, the primary reason for its unenforceability lies in the impaired judgment at the time of agreement.

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