Final answer:
An intoxicated person may lack the capacity to contract if they cannot understand the nature of the transaction or form a rational judgment about it. The contract may be voidable or valid depending on whether the intoxication was apparent and whether the sober party took advantage of the situation. Legal principles regarding competency apply, and failure to disaffirm the contract upon sobriety may lead to its ratification.
Step-by-step explanation:
The question of whether an intoxicated person has the capacity to contract is a complex legal issue. Generally, intoxication can affect a person's ability to understand the nature and consequences of the transaction, thereby impacting contractual capacity.
Capacity to contract refers to the legal ability to enter into a binding contract. Persons who are intoxicated may not fully comprehend the terms of the contract, or they may lack the ability to form the requisite intent to enter into the contract.
According to legal precedence, an intoxicated person may be deemed incompetent to contract if the intoxication is severe enough that they cannot understand the nature of the transaction or form a rational judgment about it.
Contracts entered into by an intoxicated person can be either voidable or valid depending on the circumstance, as competence is presumed until adjudication of incompetence.
The law typically looks at whether the party had the capacity to understand at the time of agreement and whether the other party had reason to know of the intoxication.
Legal cases such as Dusky v. United States and Godinez v. Moran establish principles regarding the assessment of an individual's competence in legal contexts, which can also apply to contractual situations. If after becoming sober, the intoxicated person does not act promptly to disaffirm the contract, they may be seen as having ratified it.