Voidable Contracts Explained in Plain English
What Is a Voidable Contract?
A voidable contract is a legally valid agreement that one party has the right to cancel or affirm. Until that party exercises their right, the contract remains in effect and enforceable.
The key distinction is choice: a voidable contract gives the aggrieved party the option to walk away, whereas a void contract was never enforceable at all.
When Can a Contract Be Voided?
- Fraud or misrepresentation — If one party was deceived about a material fact before signing, the deceived party may void the agreement.
- Duress or undue influence — Contracts signed under threats, coercion, or manipulation of a vulnerable person are typically voidable.
- Mistake — A mutual mistake about a fundamental fact (e.g., both parties believed an item existed when it did not) can make a contract voidable.
- Minor's contracts — In most states, a person under 18 can void contracts they entered into, with limited exceptions for necessities.
- Incapacity — If a party was mentally incapacitated or intoxicated at the time of signing, the contract may be voidable at their election.
What Happens When You Void a Contract?
When the entitled party voids the contract, both sides are generally expected to return what they received — a process called rescission. If one party has already performed work or delivered goods, courts may order compensation to prevent unjust enrichment.
Important Timing Considerations
The right to void a contract does not last forever. If the aggrieved party continues performing under the agreement after discovering the problem, a court may find they ratified the contract, losing their right to cancel.
When to Consult a Lawyer
If you believe you were misled, pressured, or otherwise taken advantage of when signing a contract, consider speaking with an attorney promptly. Waiting too long can result in losing your right to void the agreement.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.