A contract is a legally binding agreement between two or more parties. It outlines the terms and conditions that both parties must adhere to in order to fulfill their obligations under the agreement. However, there are certain instances where a contract can be voidable, meaning that one party has the option to either enforce or void the contract.
In plain English, voidable means that the contract is not entirely valid. The term voidable denotes that there is a possibility that the contract may not be upheld in a court of law. There are several circumstances in which a contract may be voidable, including:
1. Lack of capacity: If one party is unable to understand the terms of the contract due to mental incapacity or age, the contract may be voidable.
2. Duress or undue influence: If one party coerces the other into signing the contract through threats, intimidation, or manipulation, the contract may be voidable.
3. Misrepresentation: If one party provides false or misleading information to the other party, the contract may be voidable.
4. Mistake: If both parties agree to a contract, but there is a fundamental misunderstanding about the terms of the agreement, the contract may be voidable.
If a contract is deemed voidable, the party that wishes to void the contract must do so within a reasonable amount of time. For example, if a person is coerced into signing a contract, they must void the contract as soon as they become aware of the coercion.
It’s important to note that voidable contracts are different from void contracts. A void contract is one that is not valid from the outset. For example, a contract that violates the law or public policy would be considered void.
In conclusion, a voidable contract is one that is not entirely valid and may be voided under certain circumstances. This is an important concept to understand for anyone who is entering into a contract, whether it’s for a business agreement or a personal transaction. By understanding what makes a contract voidable, you can protect yourself from potential legal repercussions down the line.