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Jan 20, 2025

Factors That Can Make a Contract Unenforceable or Voidable

In today’s world, understanding your rights is crucial for protecting yourself in both personal and professional realms. Legal terms, statutes, and regulations can often seem daunting and confusing, but knowing your basic legal rights can empower you to make informed decisions and defend yourself in various situations. This guide aims to simplify key concepts, explain where to seek help, and provide you with the knowledge to navigate the legal maze with confidence.

Several issues can undermine a contract’s enforceability, even if it initially seemed valid:

If one party makes a false statement of fact that induces the other party into the contract, it can be a misrepresentation. If this is done dishonestly or recklessly (known as fraudulent misrepresentation), it can have severe consequences. Even careless or negligent misrepresentation can impact enforceability. For example, if a seller makes a statement about a car's condition that they have special knowledge of, this statement is more likely to be considered a term of the contract rather than a mere representation
A contract entered into under duress (threats or physical force) or undue influence (unfair pressure due to a position of power or a relationship of trust) may be set aside because consent was not free. In such cases, the victim must take steps to rescind the contract, but this right can be lost if restitution is impossible, the contract has been affirmed, or a bona fide third party has acquired title to the property. For example, if a wife guarantees her husband's business loan under misrepresentation of the liability, the charge can be set aside in its entirety if she received no benefit.
While not always a straightforward reason to invalidate a contract, a fundamental mistake about a core aspect of the agreement could mean there was no true agreement between the parties, potentially affecting enforceability. A mistake will not affect assent unless it is "as to the existence of some quality which makes the thing without the quality essentially different from the thing as it was believed to be". For example, if both parties fundamentally mistaken that a car could be converted to automatic transmission without affecting its functionality, the contract might be voidable for common mistake. In some cases, the court of equity could reform a contract to align with the precise intentions of the parties where it contained less than intended due to mistake. The legal impact of such mistakes can vary based on the specific facts and context.

Disclaimer:

This article is for informational purposes only and does not constitute legal advice. Laws and regulations can change. For specific legal advice regarding your situation, consult with a qualified  attorney

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