## Facts

- Two physicians, Bernard Krasner and Morton S. Berk, shared leased medical offices and split rent from 1964 to 1969.
- In April 1969, they renewed the office lease for three years beginning June 1, 1969.
- On May 22, 1969, they signed a separate written agreement (drafted by Krasner’s attorney) requiring each to pay half the rent and taxes for the lease term, even if one moved out or could not use the space due to disability or “for any other reason.”
- Berk was later diagnosed with presenile dementia (November 1969); he closed his office and moved out in July 1970.
- The parties stipulated Berk’s unpaid share of rent and taxes from August 1, 1970 through May 31, 1972 was $7,754.18.
- Lay witnesses (Berk’s wife and brother) described progressive cognitive and functional decline beginning in 1967, including confusion, missed appointments, inability to answer direct questions, and disorientation in travel and daily tasks.
- A neurologist testified that by June 1969 Berk had serious cognitive impairment consistent with slowly developing, irreversible presenile dementia affecting more than memory and ultimately leading to cessation of practice in July 1970.
- The trial court found for Berk on the ground of mental incapacity; the Appellate Division ordered judgment for Krasner; the Supreme Judicial Court reinstated the trial court’s judgment for Berk.

## Issues

1. Whether the evidence permitted a finding that, at the time of the May 22, 1969 agreement, Berk was of unsound mind and unable to understand in a reasonable manner the nature and consequences of the transaction.

## Decision

- The Supreme Judicial Court reversed the Appellate Division and dismissed the report, reinstating the trial court’s judgment for Berk.
- The court held the record contained sufficient lay and medical evidence to support the trial judge’s finding that Berk lacked contractual capacity when he signed the agreement.
- The court treated capacity as a fact question for the trial judge and declined to disturb the finding where supported by evidence, even though contrary evidence existed.

## Legal Principles

- A contract is voidable for mental incapacity if, due to mental illness or defect, the party is unable to understand in a reasonable manner the nature and consequences of the transaction.
- Capacity at the time of contracting is primarily a question of fact; appellate review asks whether the evidence warranted the trial judge’s finding, not whether a different finding was also possible.
- Lay testimony describing functional impairment, together with expert medical testimony on cognitive deficits, can support a finding of incapacity.
- The improvidence of a transaction may corroborate incapacity when consistent with other evidence, but improvidence alone is insufficient.

## Conclusion

The court upheld a trial judge’s determination that a physician’s presenile dementia prevented him from reasonably understanding the long-term financial obligations imposed by a rent-and-tax cost-sharing agreement, and it reinstated judgment for the defendant on the ground of contractual incapacity.


Krasner v. Berk, 319 N.E.2d 897 (Mass. 1974)