PROBLEM: You are an attorney and your old friend John contacts you. John has rec

Question

PROBLEM:

You are an attorney and your old friend John contacts you.   John has recently started his own business to sell a new product he has developed.   The product is a new design for small, light-weight personal headphones, as would be used with an smartphone, digital tablet, MP3 player or a radio. His questions to you concern several issues of what he should look for in creating contracts for his business.

Question:

(2.) Sammy Slurringly, owner of Sammy's Stereo Mart (a chain of electronics stores), takes John out for lunch to discuss a contract to purchase the headphones for sale in his stores. Sammy orders too many glasses of wine and gets his "wine goggles" on. John only has one glass of wine. Sammy Slurringly (pun intended) then asks John: "Okay, what's your bottom dollar price for 100,000 headphones?" John replies "$10 each." Sammy then signs a contract to purchase 100,000 headphones at $10 each. Sammy is not "drunk" by any means, but is feeling a bit "buzzed" from the wine.  The next morning, Sammy emails John telling him he has second thoughts and wants to rescind the contract. Advise John as to any defense(s) that Sammy Slurringly may assert regarding the the contract. Explain in detail what defense(s) may or may not apply and also discuss whether Sammy may rescind (cancel) the contract.

Explanation / Answer

In this case the contract is signed by Sammy so John can actually use the signed contract as a defense so that the deal is done. Sammy can assert that the contract was made when we was not in his full senses, but John must state that he is not responsible because he was not aware of Sammy's condition. In such situations John should focus on the contract part because that is the best asset he possess. This contract can be cancelled if both the parties agree or else it seems difficult because John can showcase the contract he possess.

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