Question

Myrna, a 40-year old teacher, wants to move to Chicago because of a job offer. She owns a house in St. Louis, her current residence, which has been appraised and valued by a professional real estate appraiser at$500,000.
She posted a "For Sale" sign in the yard that stated "Make an Offer". Ned, who is a casual friend of Myrna's, responded to the sign and made an appointment with Myrna to tour her house. Later, Ned invited Myrna to dinner to discuss the house and a possible sale. Myrna and Ned had a leisurely dinner, and 2 glasses of wine each with dinner. At the end of dinner, Ned offered Myrna $225,000 for her house; Myrna accepted.
Ned and Myrna signed a sales contract, but before the deal was completed and before the deed was transferred to Ned, Myrna's relatives tried to urge Myrna to cancel the cancel the contract claiming that the contract was unenforceable.

If it is found that the liquor caused a capacity issue, is the contract void or voidable? If voidable, who can void it, Myra, Ned or both?

Answer 1

In this case the contract will be voidable if it is found that liquor caused a capacity issue. It should be noted that voidable contracts are valid agreements but one or both of the parties to the contract can void the contract at any time. As per the provisions of law contracts that are entered into when one or both the parties are incapacitated will not be enforceable under law. In this case the consumption of liquor had caused the incapacitation.

In this case Myrna can void the contract because clearly Ned has obtained an unfair advantage over Myrna and hence the residence that was valued at $500,000 has been agreed to be sold at less than half of that value at $225,000. Court of law will hold that Myrna was intoxicated and hence was deprived of her power of reasoning and was unable to comprehend the consequences of her act in accepting the price of $225,000.