ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, December 26, 2017

What happens in Vegas ends up in court!

Intoxication always seems like such an irresistible thing to test, because it's so easy to slip into a hypo. A recent case out of Nevada, Wynn Las Vegas, LLC v. Tofani, No. 69936 (behind paywall), brings it up as an issue in the context of Las Vegas gambling. You can listen to the oral argument here (the audio quality is kind of terrible; sorry about that). The Wynn casino advanced Tofani $800,000 in credit, all of which Tofani gambled and lost, and the Wynn is now attempting to collect the debt. Tofani's main defense consisted of lack of capacity because he was intoxicated at the time he borrowed the money. (He also argued that he lacked capacity because of a gambling addiction, but the court found that to be irrelevant based on Nevada statute.)

The Wynn did win a jury verdict but only of $450,000. The majority opinion found that there were fact issues regarding Tofani's level of intoxication and reasonable disaffirmation of the contract, so those were questions that properly went to the jury. However, the jury instructions were incorrect, so the majority reversed and remanded for a new trial.

A concurrence in part - dissent in part walked through Tofani's intoxication defense in more detail. Tofani had indisputably affirmed his debt to Wynn in writing several times...until, eighteen months after incurring the debt, his wife found out how much money he owed, after which he began disaffirming the debt, leading to this lawsuit. The concurrence/dissent pointed out that either Tofani owed $800,000 or Tofani didn't. Therefore, the jury's verdict made no sense: Nobody contended at any point the possibility that Tofani only owed half the amount. The majority's way of dealing with this was through the incorrect jury instruction, but the concurrence /dissent pointed out that there was no fact issues for the jury to resolve: A contract entered into while intoxicated is voidable, not void. The intoxicated person must disaffirm the contract...which Tofani did not do for eighteen months and, to the contrary, repeatedly affirmed the contract in writing. Therefore, Tofani, having indisputably ratified the contract, could not disaffirm the contract later. 

Anyway, entering into a contract while intoxicated doesn't mean you get to keep whatever you were given: "He doesn't get to keep the money forever just because the contract is void; it doesn't magically morph into a Christmas gift with no strings attached just because he was drunk." 

http://lawprofessors.typepad.com/contractsprof_blog/2017/12/what-happens-in-vegas-ends-up-in-court.html

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