What Does It Mean When a Contract Is Voidable

When two parties enter into a contractual agreement, they both expect to have their rights and obligations protected. However, sometimes unforeseen circumstances may occur that render the contract unenforceable. This is when the concept of voidability comes into play.

A contract is considered voidable when one or both parties have the right to cancel or nullify the agreement. Voidable contracts are usually created due to a fraudulent, mistaken, or coercive factor that makes it impossible for one of the parties to fulfill their obligations. This means that while the contract is legally binding initially, it can be declared invalid if certain conditions are met.

It`s important to note that voidable contracts are different from void contracts in that the latter is considered null and unenforceable from the very beginning. Voidable contracts, on the other hand, are valid contracts until they`re canceled or voided by either party.

One example of a voidable contract is when one party is misled or deceived during the contract formation process. For instance, if a car dealer fails to disclose a vehicle`s history to a buyer, and the buyer later discovers the car was involved in an accident, the buyer could have grounds to declare the contract voidable.

Another example of a voidable contract is when one party is coerced or pressured to enter into the agreement. This could happen when one party uses threats or intimidation to force the other party to sign the contract. If the threatened party can prove that they were coerced, the contract could be voidable.

Finally, mistake can also make a contract voidable. When both parties enter into the contract with different assumptions or misunderstandings, the contract may not be legally binding. For instance, if a seller mistakenly includes the wrong product description in the contract, the buyer could have grounds to make the contract voidable.

In summary, a contract is voidable when either party has the right to cancel or nullify the agreement due to fraud, coercion, or mistakes. While the contract is initially legally binding, it can be declared invalid if certain conditions are met. Voidable contracts can pose challenges to all parties involved, and it`s important to seek legal advice to navigate the process.

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