Final answer:
In contract law, if an intoxicated person lacks the mental capacity to understand the creation of a contract, it is voidable. They can disaffirm the contract while intoxicated or shortly after becoming sober, but must pay restitution. Once sober, they may also ratify the contract, fully accepting its terms.
Step-by-step explanation:
Contracts by intoxicated persons involve understanding when a contract is voidable and the conditions under which an intoxicated person can either disaffirm or ratify a contract. (1) General Rules: If a person was sufficiently intoxicated to lack the mental capacity to comprehend the legal consequences of entering into the contract, the contract may be voidable at the option of the intoxicated person. If the individual's intoxication was so severe that they could not understand making a contract, that person can choose to void it if they wish.
(2) Disaffirmance: An intoxicated person may disaffirm the contract at any while intoxicated and for a reasonable time after becoming sober but must make full restitution. In the context of contracts for necessaries, even though the contract is voidable, the intoxicated person must pay for the reasonable value of the goods or services received.
(3) Ratification: After becoming sober, a person can ratify a contract that they formed while intoxicated, acknowledging the contract and agreeing to be fully bound by it, thus becoming fully liable for its terms.