There are certain situations when a contract becomes void. Void means that the contract is no longer valid and can’t be enforced under state or federal laws. A contract can become void if:
- The contract is against prevailing public policies
- The contract is severely one-sided
- The contract involves illegal matters (such as drug dealing or other crimes)
- Any of the parties to the contract is not "competent" to enter into a legal agreement
- The contract is impossible to perform
- The contract restricts certain rights or actions (such as the right to work)
These types of issues can make a contract immediately "void on its face". This means that the contract is void as is and can’t be changed or amended. In such cases, the court usually cancels the contract entirely.
A voidable contract refers to a contract that is valid, but can become void at the election of one of the parties. These are valid contract, and can still be performed, but they can also be voided if the non-breaching party chooses to do so. Voidable contracts include issues like:
- One party wasn’t of legal age when they entered into the contract (or did not have a valid legal representative)
- The contract was entered into under conditions of coercion or trickery
- One of the parties did not have the mental capacity to form a contract (i.e., they were under the influence, insane, or other conditions)
Thus, the contract is generally considered "voidable at the election" of one of the parties. In some cases, the court may allow a portion of the contract to be rewritten. This is not always the case, however, and legal remedies (such as damages) will of course vary depending on the situation.
Contract laws can be difficult to understand. You may need to hire a business lawyer if you need help with creating, drafting, or editing a contract. Your attorney can provide guidance and can help ensure that your contract will not be void or voidable in the long run. In the event of a breach of contract or a violation of contract laws, your lawyer can provide you with legal representation during court meetings.