As a copy editor with expertise in SEO, I am pleased to present this article on “What is a Voidable Contract?” Contracts are an integral part of modern society, as they are used to establish legally binding agreements between two or more parties. However, not all contracts are created equal. Some contracts may be voidable, which means that they are legally unenforceable under certain conditions. In this article, we will explore what a voidable contract is, its characteristics, and what can render a contract voidable.
What is a Voidable Contract?
A voidable contract is a legal agreement that one or both of the parties involved can disaffirm or cancel due to some flaw in the contract`s formation. Unlike a void contract, which is an agreement that is not legally effective from the outset, a voidable contract is initially valid, but it becomes unenforceable if a specific circumstance arises and renders it voidable. Voidable contracts are also sometimes known as “voidable agreements.”
Characteristics of a Voidable Contract
Voidable contracts share certain characteristics that distinguish them from other types of contracts. One of the main features of these contracts is that they are legally binding at the time of formation, but they can later be voided by one or both parties. This means that, even though the contract is technically enforceable, it may be canceled under certain conditions.
Another characteristic of a voidable contract is that it must be entered into by parties who have the legal capacity to enter contracts. For example, minors, mentally incapacitated persons, and others who lack the mental capacity to make rational decisions cannot enter into legally binding contracts. Thus, if a minor signs a contract, they can later disavow it, which makes the contract voidable.
What Can Render a Contract Voidable?
Several circumstances can render a contract voidable. One of the main reasons for disaffirming a contract is a lack of capacity to contract. As discussed earlier, minors, individuals with mental disabilities, and those who are under the influence of drugs or alcohol generally lack the capacity to enter into binding agreements, which renders the contract voidable.
Another reason that a contract may be voidable is coercion or undue influence. If a party uses threats, physical force, or psychological manipulation to coerce the other party into signing the contract, the agreement may be voidable. Similarly, if one party takes advantage of the other party`s vulnerable position to obtain an unjust benefit, the contract may be considered voidable.
In conclusion, a voidable contract is a legal agreement that is legally binding, but it may be canceled or disaffirmed if certain circumstances render it voidable. Voidable contracts are distinguishable from void contracts, which are not legally effective from the outset. The main characteristics of voidable contracts are that they are initially valid and legally binding but may become voidable under certain conditions. Some reasons why a contract may be voidable include a lack of capacity to enter agreements, coercion, or undue influence. It is crucial to understand the circumstances that can render a contract voidable to ensure that you do not find yourself in an unenforceable agreement.