What is the status of a contract made by a legally declared insane person?

A contract made by a legally declared insane person is considered void. This is because individuals who are deemed legally insane do not have the mental capacity to enter into a contract. The law requires that parties entering into a contract must have the ability to understand the nature and consequences of the agreement they are entering. As such, contracts made by those who are legally declared insane are rendered null and have no legal effect.

In legal terms, a void contract is one that cannot be enforced by any party. Since the insane individual lacks the requisite mental capacity, any agreement they attempt to make is ineffective from the start. This stands in contrast to other categories of contracts, such as voidable contracts, which may be enforced unless the party with the ability to void the contract chooses to do so.