Naturally there must be at least two parties to a contract; a man could not make an enforceable contract with himself. The parties must meet on the same mental plane; an idiot, or insane person cannot make a binding contract, he not knowing the nature of his act or what he signs. A delusion upon one subject may, however, not incapacitate him, as he may be thoroughly intelligent as to other things. They must meet on the same legal plane; an infant cannot be bound by his contract. He may sell his realty, receive and spend the price paid him, then disaffirm his contract and a court will restore to him his property.
The question of competency, from a practical viewpoint, concerns more particularly the legal capacity to sell of executors, trustees and persons acting under a power of attorney.
They have only such rights and privileges as may be given them by the instrument appointing them. Care should be taken to have them produce and to examine such instrument before entering upon a contract with them. It may be they are restricted as to price, terms, time within which to act, or in some other way, which would prevent their consummation of the contract.
A corporation which is about to sell real estate authorizes its president or other officer by by-law or resolution to execute the contract. Customarily the purchaser does not insist upon seeing the original or a certified copy of such by-law or resolution but assumes the fact that the officer has authority to execute the contract since he is in possession of the corporate seal which he impresses upon the contract. There is no reason, however, why inquiry concerning the officer's authority should not be made, particularly if the purchaser is paying a considerable deposit on the signing of the contract. Where the sellers are co-owners (joint tenants, tenants in common, or co-partners) it is advisable that the purchaser insist upon all the owners signing the contract.