There might be legitimate reasons why A made such a contract. For one thing, it might have been a way of making what amounted to a gift to B. A might wish to be rid of the expense of maintaining the car, or think that B could better care for it. A might have wished to, in effect, purchase the good will of B in some other, nominally unrelated matter.
If A later wants to repudiate the contract, a Judge might well ask "If you thought the agreement was so absurd, why did you agree to it and sign the contract?"
There is nothing in the question to suggest that the contract was unconscionable No duress is mentioned, nor any threats. No undue influence or unfair imbalance of bargaining power is mentioned in the question, nor any objective reason to void the contract. Only its alleged absurdity is given as a reason. I think this is not a sound basis on which to declare the contract void.
If it could be established on some outside evidence that A had no intent to enter into a contract, that might be a reason to void the document purporting to be a contract.
English legal sources are not clear on when a contract may be modified, much less voided, to make it "make sense".
In "Contractual interpretation: when can you stray from the strict wording?" lawyer Jason Rix of the firm Allen & Overy discussed the case of Arnold v Britton & ors [2015] UKSC 36, 10 June 2015 it which it was claimed that the exact terms of a contract should be modified because they were absurd or lacked "commercial common sense". The court did not agree.
Rix wrote:
For businesses and lawyers, a new test set out by the Supreme Court will help inform when one can stray from the literal words of a contract and adopt an interpretation that accords with commercial common sense. The Supreme Court has supported a literal interpretation of a 1974 service charge clause in a lease even though it means that it is harsh for the individual tenants. In doing so it has set clear limits on the "commercial common sense" approach to the interpretation of English law contracts. This interpretation meant that the tenants will be paying over GBP 1 million per annum each at the end of their 99-year leases.
There were a number of 1974 leases, with variable wording. However, this article focuses on the following sample clause which provided that the lessee was:
To pay to the Lessor without any deductions in addition to the said rent as a proportionate part of the expenses and outgoings incurred by the Lessor in the repair maintenance renewal and renewal of the facilities of the Estate and the provision of services hereinafter set out the yearly sum of Ninety Pounds and Value Added tax
(if any) for the first Year of the term hereby granted increasing thereafter by Ten Pounds per hundred for every subsequent year or part thereof.
he lessor argued that the service charge provisions provided for a fixed annual charge of GBP 90 for the first year of the term, increasing each year by 10% on a compound basis. The current lessees primarily argued that this interpretation gave such an increasingly absurdly high annual service charge in the later years of each lease that it could not have been intended. ...
When interpreting a written contract, the court has to identify the intention of the parties by reference to "what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean", to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 (see August/September 2009 Litigation Review).
It does so by focusing on the meaning of the relevant words, in their documentary, factual and commercial context. Lord Neuberger (providing the leading judgment in this case) held that that meaning has to be assessed in the light of: (i) the natural and ordinary meaning of the clause; (ii) any other relevant provisions of the contract; (iii) the overall purpose of the clause and the contract; (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed; and (v) commercial common sense; but (vi) disregarding subjective evidence of any party's intentions.
...
Having examined the clauses (and their variations) in detail, Lord Neuberger was not persuaded that anything had gone wrong with the wording. He was also far from convinced, given when the leases were entered into, that the original lessee's agreement was commercially far-fetched (though he acknowledged that it had become so). He didn't even think that reading the words "up to" into the clauses made sense since that would render the cap was so high as to be ineffective. He therefore upheld the literal reading of the clause.
...
for many years, the English courts have moved away from the historic and very strict approach which supposedly used to characterise contractual interpretation. The courts have introduced the "factual matrix" and "commercial common sense" tests, as well as implied terms to cater for cases where a literal reading might otherwise produce extreme or absurd results.
However, "commercial common sense" has a risk of being in the eye of the beholder, and it has been difficult to set useful limits on how and when it might be applied. In this case, recent inflation rates have produced seemingly absurd results for the tenants. However, compounding service charges at 10% annually in 1974 – when some of the leases were first entered into – would equally have resulted in the landlord having to pay considerably more to provide the services than s/he could recover from the tenants who received those services. Viewed in this light, there was nothing inherently offensive to commercial common sense in the construction of the agreement adopted by the majority. Rather, chance meant that the bargain has turned out – so far – to be severely disadvantageous for one side, and highly beneficial for the other. The position could, of course, reverse itself, depending on future inflation rates. Equally, the bargain could have turned out, or could still turn out, to be roughly equal for both sides.
See also "Contract interpretation – who has commercial common sense?" by Shy Jackson, Partner at Bryan Cave Leighton Paisner LLP. In this articled the author writers:
Interpretation is an objective exercise under English law but we know that parties sometimes agree to terms that appear on their face uncommercial but in fact make sense because, for example, the party is investing in entering into a new market or a new relationship, the party’s financial position left it with little choice or perhaps it simply made a mistake. Can the courts take account of such matters or does the objective approach mean that they are simply ignored? In any event, how to decide what makes commercial sense?
