Voidable Contracts: Everything You Need to Know
Voidable contracts may end up being determined as unenforceable. There’s any number of legal reasons why this may end up being the case in the eyes of the court; typically, it comes down to the terms and conditions that were laid out in the contract or to protect one of the parties from any unfairness in the negotiation process.3 min read
Voidable contracts may end up being determined as unenforceable. There’s any number of legal reasons why this may end up being the case in the eyes of the court; typically, it comes down to the terms and conditions that were laid out in the contract or to protect one of the parties from any unfairness in the negotiation process. While a voidable contract is typically considered legal and enforceable from the outset, it may end up being rejected if it is ultimately found to be defective, in some way.
Some of the reasons why a contract may end up being voided include:
- Mistake, fraud, or misrepresentation.
- Coercing one of the involved parties into entering the contract through fear, intimidation, blackmail, or other illegal or unethical means.
- Failure to disclose information or material facts.
- One of the involved parties being unable to legally enter into a contract due to age or mental capacity.
- Breach of contract.
Even if there are certain defects within the contract, if neither party chooses to exit the agreement, then the contract is still enforceable. It is worth noting that one’s failure to fully read or obtain clarity on the specifics of a contract does not deem it voidable.
Just because a contract you have written or entered into is deemed voidable, doesn’t mean that is all is lost. Via the ratification process, an otherwise voided or voidable contract can be corrected. This requires all of the involved parties to agree to the terms and conditions of the contract, and the removal of whatever language or sections were the cause of it being initially voided.
Additionally, in such cases as a contract being voided due to the age or mental capacity of one of the signatories, the contract can be ratified by:
- Waiting until such time as the underage party is over the age of 18 and re-introducing the contract.
- Allowing a parent or legal guardian to enter into the contract on the minor’s behalf.
- Allowing for someone with power of attorney to enter into the contract on behalf of the incapable party.
- Waiting until the incapacitated party is no longer under the effect of any mind-altering substances that affected their ability to enter into a contractual agreement.
Difference Between Void and Voidable
It can be easy to confuse the terms “void” and “voidable.”
A contract is voidable when one of the parties would have never entered into the agreement if they had known the true nature of the terms and conditions prior to signing. For example, upon finding out that there are illegal activities, such as gambling or prostitution, involved in the execution of the contract, it can then be deemed voidable.
Additionally, contracts that prohibit or place restrictions on someone’s rights (for example, whom a person may marry, where they live, or where they can freely go) are voidable, as are any contracts that are in contradiction to public policy.
Meanwhile, a contract is void when one of the involved parties was not in a position to enter into a legally binding contract, in the first place; a primary example of this is someone who is under the age of 18 and not legally emancipated. Additionally, should it become impossible to fulfill the expectations of the contract, say because one of the involved parties passes away or is otherwise incapacitated, then the contract will be void.
When to Consult With an Attorney
Anytime you are entering into a contractual agreement, whether as the party drafting it or one of the signatories, it is always wise to consult with an attorney who specializes in contract law, as contracts are legally binding documents. As such, you do not ever want to find yourself in breach of contract, nor do you want a contract that you drafted to be deemed voidable and unenforceable. Either of these scenarios can end up costing you a great deal, both in terms of time and money.
As such, utilizing the skills of a reputable and knowledgeable attorney to help you draft any necessary contracts, or assist you in fully understanding the terms and conditions before you sign anything, can help alleviate confusion or legal action down the road.
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, Menlo Ventures, and Airbnb.