Practice Quiz

CLEP Business Law

Category - Contracts

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When is intoxication a defense to the formation of a contract?
  1. Intoxication is never a defense to the formation of a contract.
  2. Intoxication is always a defense to the formation of a contract.
  3. Intoxication is a defense to the formation of a contract if the non-intoxicated party contributed to the intoxication of the other party.
  4. Intoxication is a defense to the formation of a contract if the other party knew that the intoxicated party was impaired and that due to the intoxication was unable to understand the nature of the transaction.
  5. Intoxication is a defense to the formation of a contract if both parties were intoxicated at the time they entered into the contract.
Explanation
Answer: D. Intoxication is a defense to the formation of a contract if the other party knew that the intoxicated party was impaired and that due to the intoxication was unable to understand the nature of the transaction. The party that was intoxicated has the option to void contract. In addition, the party that was intoxicated must attempt to repudiate the contract within a reasonable period of time.
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