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Barker v. Roelke3/20/2003
ich will relieve a party from a contract. See Green v. Morris, 43 S.W.3d 604, 607 (Tex.App. B Waco 2001, no pet'n).
Appellees have responded to appellant's claim for rescission by asserting the affirmative defenses of ratification and waiver. Ratification occurs when a party recognizes the validity of a contract by acting under it, performing under it, or affirmatively acknowledging it. See Zieben v. Platt, 786 S.W.2d 797, 802 (Tex.App. B Houston [14th Dist.] 1990, no writ). Ratification may either be express or implied from a course of conduct. Once a party ratifies a contract, it may not later withdraw its ratification and seek to avoid the contract. See Spellman v. American Universal Investment Company, 687 S.W.2d 27, 29 (Tex.App. B Corpus Christi 1984, writ ref'd n.r.e.). Any act inconsistent with an intent to avoid a contract has the effect of ratifying the contract. See Old Republic Insurance Company, Inc. v. Fuller, 919 S.W.2d 726, 728 (Tex.App. B Texarkana 1996, writ den'd). Whether a party has ratified a contract may be determined as a matter of law if the evidence is not controverted or is incontrovertible. See Old Republic Insurance Company, Inc. v. Fuller, supra at 728.
With respect to appellant's mutual mistake of fact allegation, he contends that the parties were mistaken as to Jackie Jay's competency and its implication on her ability to effectively consent to the settlement reached between appellant, Ronald Jay, and appellees. Appellees assert that appellant ratified the releases by continuing to seek the enforcement of the settlements reflected by the execution of the release for almost three years after Jackie Jay filed her original intervention. Appellant responds to appellees' contention by arguing that he could not have ratified the releases until the issues of Jackie Jay's consent and competency were resolved by the courts.
It would appear that most allegations of mutual mistake of fact involve objective matters which can easily be confirmed or refuted. The facts in this appeal are somewhat unique because questions concerning a person's competency to give effective consent to a contract are matters of subjective inquiry. Despite the subjectivity of the allegedly mistaken fact, we disagree with appellant's position that he was entitled to wait without consequence for a judicial determination of the alleged mistake. The RESTATEMENT (SECOND) OF CONTRACTS ยง 380(2) (1981) provides:
The power of a party to avoid a contract for mistake...is lost if after he knows or has reason to know of the mistake... he manifests to the other party his intention to affirm it or acts with respect to anything that he has received in a manner inconsistent with disaffirmance. (Emphasis added)
We have not found any Texas cases which have either adopted or rejected the application of Section 380(2) with respect to a party's power to set aside a contract for mutual mistake. In the absence of controlling authority to the contrary, we adopt the Restatement's standard of "knows or has reason to know." We therefore examine the summary judgment evidence to determine if and when appellant knew or had reason to know that the parties were mistaken with respect to Jackie Jay's competency.
Attorneys for the parties took the deposition of William Bruce Jones, Ph.D., on February 27, 1998. Dr. Jones is a neuropsychologist who performed an evaluation of Jackie Jay in January of 1998. He testified that his examination of Jackie Jay indicated that the brain injuries which she suffered in the accident resulted in severe cognitive impairment which precluded her ability to make decisions of a legal nature. The record further indicates that the probate court for Grayso
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