How to Nullify a Contract
When you nullify a contract, you legally declare the contract as void and no longer enforceable by the law.3 min read
When you nullify a contract, you legally declare the contract as void and no longer enforceable by the law. This is often because the terms of the contract are illegal, cannot be realistically carried out, or it does not involve parties that can legally agree to the contract. In most cases, it means one party is no longer benefiting from the terms of the contract.
Basic Requirements of a Legal Contract
There are a few characteristics that must be present in order for a contract to be legally binding and enforceable.
- Offer/acceptance: One party must make an offer, and the other party must accept the terms of the contract in writing.
- Legal object and capacity of parties: Each party must be of legal age, mentally capable, and agree to the terms of the contract on his or her own free will.
- Consideration: The contract must have an element of price or value exchanged. Value does not always indicate money. It can also refer to interests, benefits, rights, or any other considerations that benefit both parties.
- Written and verbal: Although some verbal contracts can be enforced, the majority of legally binding contracts are written. This is especially true of long-term contracts.
How to Nullify a Contract
Nullifying, or voiding, a contract requires that one of the parties shows proof that the contract is no longer enforceable. Once the contract is nullified, both parties are released from the terms of the agreement. Some situations lead to an immediate void of the contract including:
- The term conditions are illegal.
- The terms violate public policy.
- The contract includes parties that are not of legal capacity.
- The actions in the contract are not possible to complete.
A voidable contract is an agreement that is not yet voided but does qualify to be voided by the party that is not in violation of the terms. Until the contract is voided, the terms remain legally binding. If the contract is nullified, all parties are released from their contractual duties.
Comparing Void and Voidable Terms
After a contract is deemed void, it is no longer legally enforceable. Because voided contracts often include illegal or unobtainable terms, it is never actually a legal document. It is considered to be void from the beginning, and it would never hold up in court.
A voidable contract is different than a voided contract in that it is currently a valid legal document. The terms of the contract must be followed until it is voided by the unbound party. Additionally, both parties can agree to move forward despite the voidable condition. A voidable contract can occur in the following situations:
- The contract involved coercion or threatening actions.
- One party was influenced into signing the contract.
- One party is not of a sound mind.
- The specific terms of the contract were not fulfilled.
- Both parties made mistakes when creating the contract.
- The contract contains fraudulent information or intentions.
- The contract includes misrepresentation.
It is important to work with an attorney if you believe that you are currently involved in a voidable contract.
How to Nullify a Contract
A contract is a legal agreement to carry out specific services or terms. Failing to follow the terms of a contract can result in financial and legal charges. In fact, the most common legal disputes today involve contract breaches. There are many reasons you might need or want to nullify a contract. Although it can be a difficult process, it is possible to nullify a legal contract.
- Evaluate the terms of the contract. Most contracts include clauses that stipulate the terms for ending a contract agreement.
- Consider the benefits to each party. Courts tend to prefer contracts that are equally beneficial. If you are on the losing side of a contract, you might have a case based on an unconscionable contract.
- Consider the needs of each party. If the other party no longer wants to keep the contract, you can mutually agree to nullify it with an anticipatory breach.
- Evaluate for breach of contract. A material breach occurs when one party can file for monetary damages. An immaterial breach excludes the possibility of monetary damages.
- Evaluate if the contract is fraudulent. If any fraudulent intent is likely, the contract can be nullified.
There are many characteristics that are needed in order to make a contract legally enforceable. Without these requirements, the contract is at risk of being nullified. Understanding how to nullify a contract can help you navigate legal contracts in any setting.
If you need help with voidable contracts, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.