Voidable Contract
The first thing we have to understand about the voidable contract definition is that it is not the same thing as a void contract. A voidable contract can become a void contract if a court deems it void based on the terms or other legal reasons that make the contract unenforceable.
A voidable contract is a type of formal agreement between two or more parties. While the voidable contract was signed, it can afterward be contested based on information that was withheld, hidden, or unknown by the parties involved in the contract.
What is a Voidable Contract?
As mentioned above, a voidable contract may be considered enforceable and legal when it is signed. At that point, the parties involved agreed on the terms mentioned in the contract, and nothing was out of order. However, if one or more of the parties involved encounters a defect within the contract or an attempted fraud through the contract’s specifications, the voidable contract can be brought in front of a judge and be rendered unenforceable or, in other words, void.
Some voidable contract examples that include reasons for a contract to be voidable are:
- An illegal party entering into the contract;
- Undue influence or manipulation;
- Mistakes, misinterpretations, or fraud;
- Withholding material facts;
- Unconscionable terms;
- A breach of contract.
Something to keep in mind, however, is that there are situations where the party could reject a contract and render it unenforceable and void through court but decides against it and goes through with the contract. In those situations, the contract remains valid and enforceable.
Voidable vs. Void Contract
When one or more parties would not have entered into a contract had they known the true nature of the contract, the contract becomes a voidable contract. The reason stated above, works as voidable contract examples as once the party is made aware or becomes aware of situations like that they can reject the contract after having signed it. Take here the voidable contract example of illegal parties. An individual that is a minor legally can not sign a contract without a parent or a guardian present. This situation can render the contract void.
In comparison, a void contract is unenforceable from the start. There is no situation in which a void contract is considered legal or enforceable. The reasons a contract is considered void from the start are agreements that are considered by nature illegal, if a party is incapable of understanding the terms, or if a party is inebriated, and so on.
Popular Real Estate Terms
Housing where affirmative action is proactively pursued protecting the housing rights of people of all races, nationalities, and religions. ...
Fee payable because of late payment. For example, a mortgagor is assessed a $30 late charge by the bank for not paying the mortgage payment when due. ...
A four-unit building with four tenants in a condominium type of ownership and management. ...
Method of appraising real estate based on the market comparison of neighboring properties having similar characteristics. Seeks to answer the question: What would it cost to substitute a ...
Value that a speculator believes an investment will reach at some point in the future. ...
Substance or material used at the top of a chimney at the roof to inhibit the development of moisture and to protect the metal. ...
Loan service charge; each point equals 1% of the amount of the total mortgage loan, which must be paid up front when a home is purchased. It is a one-time, immediate charge that increases ...
Depressed, poorly kept locality that may include vacant businesses. It may be a high crime area. The people living in the area are typically poor and there may also be homeless people. ...
The term straight note in real estate is also known as a promissory note. A straight note is defined as a loan agreement that generally requires payments of interest only over the term of ...
Have a question or comment?
We're here to help.