Question

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 :	Oliver entered into a contract while he was on drunk for the purchase of the House at an auction. Later on while he was sobered up, he agreed to the contract. Then he subsequently refused to complete the contract. We need to analyse whether Oliver is obliged to the contract or not!?
RULE :	As per United States Contract Law, “A contract is an agreement between two or more parties creating reciprocal obligations enforceable at law. The elements of a contract are mutual consent, offer and acceptance, consideration, and legal purpose.” Mutual consent, also known as meeting of the minds, is typically established through the process of offer and acceptance. Meeting of Minds means the persons at the time of entering into the contract must be capable of understanding all the terms and conditions of the contract. When the meeting of minds is not done at the time of contract, then the contract is VOIDABLE at the option of the party.
Analysis :	In the given case, Oliver was drunk and didn’t know what he was doing. Here the meeting of minds is not taken place and the contract is voidable at the option of Oliver. Although Oliver agreed to the contract after sobered up, the contract itself is not taken place properly from the beginning and hence Oliver can Cancel the contract after proving himself that the contract was not entered properly and meeting of minds is NOT taken place.
Conclusion :	Hence it can be concluded that the Contract is Voidable by Oliver and Oliver is Not bound by the contract even after he agreed later.