The courts hold that a contract entered into by an intoxicated person or an insane person is always voidable.

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A contract entered into by an intoxicated person can be voidable if the intoxication was so severe that they were unable to understand the nature of the transaction. However, if they were merely under the influence and still able to understand the contract, it may not be voidable. Similarly, contracts entered into by individuals declared legally insane or who are unable to understand the contract due to insanity can be void or voidable, but not all contracts entered into by someone with a mental illness are automatically voidable. The capacity to enter into a contract is evaluated on a case-by-case basis.

The Courts Hold That a Contract Entered into by an Intoxicated