## Facts

- Patricia Speleos owned residential property at 718 Marietta Place, N.W., Washington, D.C.
- In March 2001, Speleos executed a lease to Bryant and Sheillia Banks that included an exclusive option to purchase.
- Later in 2001, Speleos was adjudicated mentally incapacitated in separate proceedings; certain contemporaneous real-estate transactions were set aside, but the Bankses’ lease was not specifically addressed.
- Title to the property was later acquired through the tax-sale process by 718 Associates; Ricardo Hernandez became successor-in-interest.
- The owner sued to recover possession, asserting the lease was a nullity because Speleos lacked capacity when she signed.
- The trial court found Speleos lacked capacity at execution but ruled the lease was voidable (not automatically void) and had not been disaffirmed by Speleos or a legal representative.
- A three-judge division reversed, relying on older precedent treating contracts of mentally incapacitated persons as inherently void.
- The court granted rehearing en banc to decide whether such contracts are void or merely voidable under District of Columbia law.

## Issues

1. Whether contracts entered into by mentally incapacitated persons in the District of Columbia are inherently void or instead voidable at the election of the incapacitated person or a legal representative.
2. Whether District of Columbia law should retain an 1892 rule treating such contracts as void, or adopt the modern majority and Restatement (Second) approach.
3. What effect the void-versus-voidable choice has on enforcement of the Bankses’ lease and the owner’s claim for possession.

## Decision

- The en banc court overruled prior precedent and held that contracts entered into by mentally incapacitated persons are voidable rather than inherently void.
- The court approved the trial court’s framework treating the lease as effective unless and until properly disaffirmed.
- The case was remanded for further proceedings to determine whether the lease had been validly disaffirmed.

## Legal Principles

- Mental incapacity does not render a contract automatically void; it creates a power in the incapacitated party (or legal representative) to avoid the contract.
- District of Columbia law aligns with the modern majority rule and Restatement (Second) of Contracts § 15: incapacity generally makes a contract voidable, not void.
- A voidable rule balances protection of incapacitated persons with transactional reliability by preventing automatic invalidation of agreements absent disaffirmance.
- Enforcement and remedies may be shaped by equitable considerations, including protection of good-faith counterparties and restitutionary limits.

## Conclusion

The District of Columbia Court of Appeals held that contracts made by mentally incapacitated persons are voidable, not void, rejecting a categorical rule of invalidity and remanding for determination of whether the lease at issue had been disaffirmed.


Hernandez v. Banks, 65 A.3d 59 (D.C. 2013)