Question

Question 3 (Note this question is from the Week 7 Tutorial) Oliver, while he was so drunk that he didn’t know what he was doing, bid successfully at an auction for the purchase of a house. It was clear to the auctioneer that Oliver didn’t know what he was doing. However, after Oliver sobered up, he confirmed the contract with the auctioneer. He then subsequently refused to complete the contract. Is Oliver bound to the contract? Required: Answer this question using the IRAC * method. (Word limit: Minimum of 150 words. Maximum of 250 words)

Answer 1

Issue: The issue here is that Oliver was not in a correct and normal state of mind as he was drunk and incapable of understanding to what he was agreeing. But he agreed to the contract when he sobered up.

Rule: The rule states that the contract is void as there is an Incapacity in contract law which means a person who is not mentally sound, which can include being intoxicated. Persons who are intoxicated cannot legally enter into a contract and intoxication thereby makes the contract voidable provided everything is return in good condition and services are not availed which can't be returned.

Analysis: Since Oliver is drunk and intoxicated the contract should be voided as he is was incapable of understanding to what he was agreeing. But, he agreed to the contact when he was sober hence he is bound to pay the amount to the auction and contract is valid

Conclusion: The contract is valid and Oliver is bound to pay the amount as he agreed to the contact when he was sober.