Is A Contract I Entered Into While Intoxicated Valid?
Entering into a contract while intoxicated
I was drunk when I entered into a contract with someone. In the eyes of the law, is that contract a valid and binding contract?
The answer to the question above is Yes and No at the same time depending on the mental capacity of the allegedly drunk person at the time of entering into the contract and other factors. Before shedding more light on this, let us first take a moment to understand what a contract is and what makes a contract valid.
What is a contract?
A contract can be simply defined as an agreement between two or more parties that is enforceable by the law courts.
A contract can also be defined as a promise or promises that will be enforced by the law. So for example, if I make a promise to you that can be enforced by the courts, then that promise is a contract.
Elements of a contract
All valid contracts must have the following elements:
- A contract must have an agreement. This means there must be an offer and an acceptance. One party to the contract must make an offer and the other party should show that they have accepted the offer.
- The intention to create legal relations must exist between the parties. The parties must both agree that in the event that one of them fails to perform what they had agreed to do, then court action must be taken.
- All the parties to a contract must have the capacity to contract. By having the capacity to contract, all parties to the contract must be of age (that is be above 18 or 21 years), must not be under the influence of drugs or alcohol, and must be of sound mind.
- There must be consideration, which means that each party to the contract must suffer a detriment in return for the benefit he or she receives.
- The subject matter of the contract must not be one that is illegal. For example, you cannot enter into a contract with someone to commit treason, kill, rape, steal, etc sine these illegal things cannot be enforceable by the law courts. The subject matter of the contract must be capable of being enforced by the law.
- The terms of the contract should be such that they are made abundantly clear to all the parties involved.
The above are the key elements of a valid contract. A contract isn’t valid until it contains all these essential elements.
Now that we have seen what a valid contract is, let us now answer the question asked at the beginning of this article.
Is a contract entered into while drunk considered valid and binding?
One of the most important elements that must exist in order for a contract to be considered valid and binding in the eyes of the law is that both parties to the contract have the capacity to contract. This therefore means that a contract is not considered to be valid and binding if one of the parties to the contract doesn’t have a contractual capacity as a result of either being insane or intoxicated.
Any lawyer or legal practitioner would tell you that if a person has no capacity to contract, and goes ahead to enter into a contract, then the law will not recognize such a contract as being valid.
Be that as it may, a contract that you signed while under the influence of alcohol can be valid and at the same time invalid depending on whether or not it can be proven that as of the time you and the other person were entering into the contract, you were actually drunk and that the person knew of your state of drunkenness and knew that you were not capable of understanding the terms of the contract yet went ahead and entered into the contract with you.
It is not very easy for the courts to void a contract based just on the claims that one of the parties to the contract was intoxicated when they signed the contract.
According to legal experts, intoxication alone isn’t strong enough for the court to intervene and void a contract. These experts say that certain things must exist before the courts can void a contract based on intoxication claims. These things are:
- The person claiming he or she was intoxicated should be able to proof that because of his or her intoxication, he or she didn’t know what he or she was doing at the time of entering into the contract and signing it.
- There should be proof that the sober party was totally aware of the other party’s state of drunkenness when he or she entered into the contract with the person who was drunk.
- Last but not least, there should be proof that the drunken party wasted no time in repudiating the contract moments after he or she became sober and realized what had happened.
NOTE: The last proof is not as important as the first two proofs.
A very good example of a case to support this is the case of Gore v. Gibson in 1845. In this case, it was held that a contract is not binding if one of the parties to the contract was intoxicated and didn’t know what he or she was doing as of the time of entering into the contract and that the other party was aware of the intoxicated party’s condition.
If you can’t prove that you were intoxicated and didn’t know what you were doing when you signed the contract and that the other party to the contract was aware of your drunken state, then it can be very difficult for the courts to void the contract.
Despite the above, a contract entered into with a drunken party can still be binding if the drunken party, upon becoming sober, decides to ratify the contract.
A good example of a case to support this is the case of Matthews v. Baxter. In this case, Baxter and Matthews entered into a contract where Baxter agreed to buy some property from Matthews. At the time the two men were entering into the contract, Baxter was under the influence of alcohol and therefore wasn’t aware of what he was doing. But when he eventually became sober, he ratified the contract. It was later held that the contract Baxter ratified after becoming sober was binding.