Legal Definitions - unenforceable contract

An unenforceable contract is an agreement that, despite meeting the basic requirements of a valid contract (such as offer, acceptance, consideration, and legal purpose), cannot be legally enforced by a court of law. This means that if one party breaches the agreement, the other party cannot successfully sue to compel performance or recover damages, usually due to a specific legal defense or technicality.

• Example 1 (Statute of Frauds):

  Imagine Sarah verbally agrees to sell her plot of undeveloped land to Mark for $150,000. They shake hands and agree on a closing date next month. However, a week later, Sarah receives a higher offer and decides to sell the land to someone else.

  Explanation: In many jurisdictions, contracts for the sale of real estate must be in writing to be enforceable, a legal requirement known as the Statute of Frauds. Even though Sarah and Mark had a clear verbal agreement, if Mark tries to sue Sarah to force her to sell the land, a court would likely find their contract unenforceable because it was not in writing. Mark cannot compel the sale through legal action.

• Example 2 (Statute of Limitations):

  A small graphic design firm, "Creative Concepts LLC," hired a freelance artist, Emily, to create a new logo for a client. Emily completed the work and submitted her invoice for $2,500, which was due three years ago. Creative Concepts LLC never paid her.

  Explanation: Most jurisdictions have a "statute of limitations," which sets a time limit within which a lawsuit must be filed after a legal claim arises. If the statute of limitations for contract disputes in that state is two years, Emily's claim against Creative Concepts LLC would be time-barred. Even though Creative Concepts LLC clearly breached their valid contract by not paying, Emily waited too long to sue, rendering the contract unenforceable in court.

• Example 3 (Illegality of Subject Matter):

  Two individuals, Robert and Lisa, enter into a written agreement where Robert agrees to pay Lisa $10,000 to illegally import a shipment of endangered animal products into the country. Lisa successfully imports the products, but Robert refuses to pay her the agreed-upon amount.

  Explanation: While this agreement has an offer, acceptance, and consideration, its purpose is illegal. Courts will not enforce contracts that involve illegal activities or violate public policy. Therefore, if Lisa attempts to sue Robert to recover the $10,000, a court would declare the contract unenforceable because the underlying agreement is for an unlawful act.