Final answer:
In the scenario of Gavin offering to sell his car to Allison and later refusing, contract formation, the Statute of Frauds, and capacity to contract are key legal principles that would determine if the napkin agreement is legally binding.
Step-by-step explanation:
In the scenario where Gavin offers to sell his expensive sports car to Allison and both parties sign a napkin to memorialize the deal, the legal principles that would likely come up if Gavin refuses to sell the car the next morning center around contract formation and enforceability. Central issues would include whether the napkin constitutes a written contract that meets legal requirements; whether there was a meeting of the minds, meaning both parties had a mutual understanding and agreement on the terms; whether there was consideration, which is something of value exchanged between the parties; and the inebriated state of the parties during the agreement, as contracts entered into while one or both parties are impaired may not be enforceable. The Statute of Frauds would also be relevant because it requires certain types of contracts, including those for the sale of goods over a certain value, to be in writing to be enforceable. In addition, the enforceability of the napkin as a legal document would be questioned as it may not contain all the essential terms of the deal, such as price, payment terms, and delivery details. Capacity to contract is another principle that would be examined, which refers to the mental ability of the parties to understand the terms and consequences of the contract at the time of the agreement.