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If you’ve come across this article, you may have entered into a contractual agreement of some type while under the influence of alcohol or drugs. Usually, people tend to make impulsive decisions while under the influence and have to deal with the consequences the day after. It could be a horrible tattoo or even an outrageous online order arriving from Amazon that you have no memory of selecting. Ideally, the worst thing that happens after a night where you had a little too much is a 20-pound box of googly eyes or beef jerky arriving at your home a few days later to surprise you.  

If you went further than that and entered into a contract, you may be wondering if there is a way out. The unfortunate news is that courts tend to strongly disfavor voluntary intoxication as a defense to contract formation and enforcement, even if you don’t remember signing the contract. Read on for more information about why it is so challenging to plead voluntary intoxication as a defense to contract formation or enforcement.  For more general information read our article, Recent Changes to Wisconsin Contract Law.

Contact signing

How Is A Contract Formed?

 

There are three essential elements for two or more parties forming a contract.  

 

Offer: one party has to offer a service or good to the other party  

Acceptance: another party must clearly recognize the service or good being offered and clearly accept it  

Consideration: consideration is the turning point where the offer and acceptance turn into a contract, and it is the “bargained-for exchange” that seals the deal.  

 

Another essential element in contract formation that is most relevant in this article is the “meeting of the minds.” The parties demonstrate that they are talking about the same goods or services; they both understand what they offer and receive. The meeting of the minds goes to the state of mind, an understanding of why the contract is formed, the terms of the contract, and a shared understanding of the formation of the contract. A Meeting of the minds is also commonly referred to as mutual assent. Without a verifiable meeting of the minds, a regular contract cannot be enforced as the contract does not exist.  Find out what makes a Wisconsin Contract Legally Binding in our recent article.

 

What Is A Defense To Contract Formation?

 

There are a few certain defenses to contract formation. The most straightforward defense is that the contract lacks consideration, as explained above. If there is no bargained-for exchange, there is no contract. Being a minor or suffering from mental illness would mean that the party is incapable of entering into a contract lacking the capacity to understand what they are doing.  

Fraud by one or both contracting parties is also a defense to contract formation, precisely because there is no “meeting of the minds” if one or both parties are lying about what the contract will do for the other party.  

The contract terms go against public policy or are against the law. For instance, you cannot enter into a contract with someone to steal a car or break into a home and expect the courts to enforce it.  

Incapacity is a defense to the formation and thus a defense to breach of contract. Many states recognize intoxication as a defense but distinguish between voluntary and involuntary intoxication. Intoxication is used to refer to being under the influence of alcohol and the influence of drugs as well, both legal and illegal.  

Performance of the contract by one or both of the parties has become impossible, or the purpose of the contract has become “frustrated.”  

Finalizing contract with a hand shake

 

What If I Signed A Contract While I Was Drunk?

 

As stated earlier in the article, intoxication a rarely a defense to entering into an enforceable contract. Typically, the courts do not care if you were drunk when you signed a contract; you are expected to take accountability. The courts do differentiate between voluntary and involuntary intoxication. In order to better understand where the courts are coming from, first, we have to look at the two types of intoxication and how they fit into a legal ruling on whether a contract was formed when one party (or both!) is under the influence.  

Voluntary Intoxication  

The thing speaks for itself. If you voluntarily entered into an intoxicated state, you have to assume that you will be held responsible for your actions while you were intoxicated. Typically, courts will not accept voluntary intoxication on its own as a defense to contract formation or enforcement.  

There is a plot twist here. If one party was three sheets to the wind and the other party knew it, it might be a defense to contract formation or its enforcement, depending on the specific facts and circumstances of the situation. If the sober party used the intoxication of the non-sober party to their advantage to trick them into entering a contract, then it could be presented to the court as a defense to the contract being formed or enforced. This defense will rely heavily on evidence. It is not enough to say, “I was drunk and they knew it and took advantage of me.” The court will need to see proof other than your own words that you were indeed taken advantage of.  

Voluntary intoxication is a defense seen most often in states where there are many casinos, which might seem odd at first but then when you realize that gambling and alcohol consumption tend to travel together tends to make sense. Casinos enter into contracts with drunk patrons every day. When a casino has a patron sign a gambling marker, they enter into a contract with that person. For those readers unfamiliar with what a gambling marker is, it is an agreement a patron enters into with a casino in order to finance their gambling. The casino is extending credit to the patron in order to allow the patron to continue gambling at that particular casino. The process of extending and accepting credit means entering into a contract.  

If the casino patron can successfully assert the voluntary intoxication defense, the court will not require the patron to pay the gambling marker that they signed while they were drunk at the casino. The fact that many casinos offer complimentary drinks while patrons play the various games in the casino could play a significant role in the courts leaning towards allowing the voluntary intoxication defense.  

 

Involuntary Intoxication

 

If the party is accused of breaching the contract, involuntary intoxication may be a defense. The turning point here is that the party accused of being in breach needs to present credible evidence to the court showing that the ingestion of drugs or alcohol was involuntary. If the accused party can show that they did not know they were given drugs or alcohol and they were under the influence involuntarily, they have a more substantial chance of not being held accountable to the terms of the contract. If there was involuntary intoxication, then there could be no true “meeting of the minds” between the parties for a contract to form. In other words, through no fault of their own, the intoxicated party could not form a contract, and the court could declare the contract void.

Additionally, there is always the strong possibility that the other party may have had a role in causing the intoxicated party to become intoxicated. One might ask if the non-intoxicated party is perhaps being mistreated by the court, not making the involuntary contract enforceable. Still, it was never really formed if one party could not contract.  

As always, if you are in a situation where you believe you are being taken advantage of because you signed a contract when you were drunk or had been trying to deal with a person claiming that since they were drunk, there is an unenforceable contract, you should consult with an attorney who is experienced in breach of contract cases.

The experienced contract law attorneys at O’Flaherty Law can advise you on the possibility of meeting your legal goals when it comes to breach of contract defense or enforcing your contract against someone claiming that they were intoxicated as a defense. Feel free to give O’Flaherty Law a call, and we would be happy to help you with your contract law matter.  

Posted 
June 9, 2022
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