A memorandum of understanding granting an option to purchase, even where it provides for a further option agreement to be drafted, may constitute a binding contract within the first Masters v Cameron class if the parties intended to be immediately bound. However, such a contract is voidable where the vendor lacked contractual capacity due to dementia and the purchaser ought to have known of the incapacity. Where the transaction is also improvident, the equitable presumption arising from unconscionable dealing applies to shift the burden to the party seeking to enforce the transaction to show it was fair, just and reasonable.
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