Voidable Contract

From the Latin Latin: voidabilis (capable of being voided).

In one sentence

A contract that one party can cancel or reject, but is otherwise valid.

Plain English

A voidable contract is a deal that looks valid on the surface, but one party has the right to back out of it. The party with the right to cancel is usually the one who was disadvantaged—like a minor, someone who was tricked, or someone who signed under duress (threats or pressure). The other party cannot force them to go through with it. However, if the disadvantaged party chooses to keep the contract, it remains binding on both sides.

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Example

An elderly woman signs a contract to sell her house for far below market value after a salesman pressures her aggressively. The contract is voidable because she was under duress. She can cancel it if she wants, but if she decides to go ahead with the sale anyway, the buyer cannot back out.

Used in a sentence

“The teenager's purchase agreement was voidable because she was a minor when she signed it.”

Related terms

Capacity

The legal and mental ability to enter into a binding contract.

Minor

A person who has not reached the legal age of adulthood, usually 18.

Duress

Forcing someone to sign a contract through threats or coercion.

Misrepresentation

A false statement of fact made to induce someone into a contract.

Unenforceable Contract

A contract that courts won't enforce, even though it's technically valid.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.