One of the first things they teach you when studying law is that you can’t have a valid contract without 5 key things (1) offer, (2) acceptance, (3) consideration, (4) capacity and (5) intention to create legal relations. The recent High Court ruling in Aspinall’s Club Ltd v Lester Hui considers the impact of alcohol on the point of capacity.

Facts of the case

Mr Lui had been a member at Aspinall’s, a casino in Mayfair, for 20 years and attended their Chinese New Year event in 2016. Whilst at the event he took his guests to gamble in a private room. Mr Lui was placing his bets against a blank signed personal cheque and was not having much luck. When his losses reached £500,000, any other person might have decided to call it a night, but he requested a further £300,000 credit extension. The club only granted £100,000 and, when his luck didn’t improve and he had also lost this money, Mr Lui drove himself home.

Mr Lui later stopped his cheque and claimed that he had been ‘blackout drunk’ the night of the event and was not capable of signing the cheque. The casino then brought claims against him in the sum of £589,724 for breach of contract.

Judgment

In the judgment, the judge stated that, although the burden of proof lies with the claimant, Mr Hui also had to show the necessary facts to support his defence. In particular, he had to show that the casino employees were aware, or should have been aware, of his level of intoxication.

In his evidence, Mr Hui argued that it would have been obvious to the staff that he was drunk as he was acting irrationally and did not usually gamble that much. They therefore should have stopped him from placing any further bets. This was however contradicted by the casino’s evidence and the judge found that Mr Hui had been prepared to lose £400,000 on at least one, and possibly two, previous occasions. Also, as he had driven himself home, the casino workers were unlikely to have realised how drunk he was. Ultimately it was held that the reasons given were insufficient to support the argument that they should have known he was too intoxicated to gamble.

Commentary

Whilst there may be a point at which you are so intoxicated that you no longer have capacity to make a valid contract, this ruling suggests that it will take more than a couple of drinks and some gambler’s remorse to qualify. You must be able to show that the other party was aware, or should have been aware, that you were too drunk to be entering into the agreement.

If you have any questions about the validity of a contract, due to a lack of capacity or for any other reason, please get in touch with a member of our Dispute Resolution team on 01494 521301.