Legal Definitions - Voidable

A voidable legal agreement or contract is one that is initially considered valid and enforceable, but it can be legally canceled or rejected by one of the parties involved. This party has a specific legal right or option to terminate the agreement, often due to circumstances like misrepresentation, duress, or a lack of full capacity to enter into the agreement. If the party with this option chooses to cancel it, the agreement becomes void, meaning it's treated as if it never existed. If they do not exercise this option, the agreement remains fully valid and binding.

• Example 1: Contract Signed Under Duress

  Imagine a small business owner who is threatened with severe financial harm unless they sign a contract agreeing to sell their company's assets at a significantly undervalued price to a larger competitor. This contract is voidable by the small business owner. While the contract appears valid on its face, the owner's consent was obtained under duress (coercion). The law provides the owner with the option to challenge and cancel the contract, making it legally unenforceable. If the owner chooses not to challenge it, perhaps due to continued intimidation or a belief that it's too late, the contract could remain valid.

• Example 2: Contract Based on Material Misrepresentation

  Consider a person who purchases a vintage car after the seller explicitly states, both verbally and in writing, that the car has never been in an accident and has its original engine. Later, the buyer discovers definitive proof that the car was involved in a major collision years ago and has a replacement engine. The car sale contract is voidable by the buyer. The buyer entered into the agreement based on a material misrepresentation (a significant false statement) made by the seller. The law gives the buyer the right to rescind (cancel) the contract and return the car, effectively treating the sale as if it never happened. If the buyer decides they still want the car despite the misrepresentation, they can choose to affirm the contract, and it will remain valid.