Answered: Peter agrees a sale for his car with…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Peter agrees a sale for his car with Alex for the sum of R1000 (even though the car is only worth approximatelyR500). However, when the contract was formed Alex was clearly under the influence of alcohol and he had trouble standing and forming a coherent sentence. When Peter attempts to enforce the contract Alex wishes to avoid it. What is the effect of this situation?

Select one:

a. Such a contract is void and hence cannot be enforced.

b. The contract is voidable as Alex was so intoxicated that he did not realise to what he was agreeing and Peter was aware of this.

c. There is no contract as a person who has been drinking alcohol cannot establish a valid contract.

d. The contract is enforceable against Alex as a person's state of intoxication will not affect a contract being formed.

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