Understanding Contract Legality: Void, Voidable, Unenforceable

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Question:

Contracts may be held to be void, voidable or unenforceable when one of the following circumstances below exist. In your own words, explain what each of these means in relation to a contract Illegality

Answer:

In the context of contracts, the terms "void," "voidable," and "unenforceable" refer to the legal status of a contract and its enforceability in a court of law. Here's a breakdown of each term, particularly in relation to illegality:

  1. Void Contract: A void contract is one that is not legally valid from the moment it is created. This means that it has no legal effect and cannot be enforced by either party. A contract may be considered void if it involves illegal activities or violates public policy. For example, if two parties enter into a contract for the sale of illegal drugs, that contract is void because it is based on an illegal act.

  2. Voidable Contract: A voidable contract is a valid contract that can be legally enforced but may be rejected or canceled by one of the parties involved. This typically occurs when one party has the right to void the contract due to certain circumstances, such as misrepresentation, undue influence, or lack of capacity. In the context of illegality, if a contract has some illegal elements but is not entirely illegal, one party may choose to void the contract if they were misled about the legality of the agreement.

  3. Unenforceable Contract: An unenforceable contract is one that, while it may be valid and legal, cannot be enforced in a court of law due to certain technicalities or legal defenses. This could happen if the contract lacks essential elements, such as proper signatures or if it is not in writing when required by law. In terms of illegality, a contract may be unenforceable if it is legal in nature but involves terms that are against public policy or if one party is unable to fulfill their obligations due to illegal circumstances.

In summary, a contract's status as void, voidable, or unenforceable can significantly impact the rights and obligations of the parties involved, especially when issues of illegality arise.