A voidable contract is a legally binding agreement that can be cancelled or invalidated by one party due to certain circumstances. Voidable contracts are different from void contracts, which are not enforceable at all. In this article, we will discuss 5 examples of voidable contracts.
1. Contracts signed under duress
If one party is forced or coerced into signing a contract, it becomes voidable. Duress can be physical or psychological. For example, if a person is threatened with physical harm if they do not sign a contract, the contract can be cancelled.
2. Contracts signed under undue influence
Undue influence is when one party uses their power or authority to influence the other party into signing a contract. For example, if a doctor convinces a patient to sign a contract for a medical procedure that is not necessary, the contract can be cancelled.
3. Contracts signed by minors
A contract signed by a minor (someone under 18 years old) is voidable. Minors are not legally able to enter into contracts because they are not yet considered legally competent. However, in some cases, the minor may choose to uphold the contract even after they turn 18.
4. Contracts based on fraudulent misrepresentation
If one party makes a false statement or conceals important information in order to induce the other party to sign a contract, the contract is voidable. For example, if an insurance salesman tells a person that a certain policy covers everything, but fails to mention a few key exclusions, the contract can be cancelled.
5. Contracts with mutual mistake
If both parties to a contract make a mistake about an important fact, the contract may be voidable. For example, if two parties sign a contract for the sale of a house, but later discover that the house was destroyed in a fire before the contract was signed, the contract can be cancelled.
In conclusion, voidable contracts can be cancelled or invalidated due to various circumstances, including duress, undue influence, minors, fraudulent misrepresentation and mutual mistake. It is important to consult with a legal professional if you are unsure about the validity of a contract.