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Voidable

DEFINITION

Act of rescinding a contract if an act is executed or not executed.

EXPLANATION

A void contract becomes invalid if it is not enforceable. This would occur if any elements of a contract are missing or if the agreement violates one or all of the parties. For example, if the agreement has some illegal obligation that either party must meet, the contract is void.

A voidable contract is a contract that is voidable because the terms of the contract may not be obligated based on the contract signing circumstances. For example, if a nonnative English speaker is misinformed of the facts of the transaction and signs a contract under duress, the agreement would be a voidable contract. Another example of a voidable contract includes an individual signing a contract while being under the influence or, more plainly, intoxicated.

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