Unenforceable contract: everything you need to know (2023)

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What is an unenforceable contract?

An unenforceable contract is a valid contract that the court does not want to enforce for some reason. An inapplicable defense, on the other hand, is commonly used to nullify or void the contract. The following explains what makes a contract null or voidable:

  • Empty: A void contract is a contract that is not legally valid
  • debatable: A voidable contract is one in which one of the parties is not legally bound by the agreement.

Disputes often arise between two parties, raising questions about the applicability of abinding contract. A perfect example of a voidable contract are cases where a minor has signed a contract.

here is an articleabout the age requirements for a legal contract.

What makes a contract void?

To determine what makes a contract unenforceable, it's easiest to start with what makes a contract enforceable. An enforceable contract is a legally binding agreement between two or more parties. To be enforceable, a contract must be valid and the defendant must not have a valid objection to it.breach of contract.

Most contracts do not have to be on paper to be considered enforceable, but those that are not are harder to prove in court. Three elements define a legally binding and enforceable contract:

  1. An offer
  2. acceptance of this offer
  3. Consideration

The first two are self-explanatory, but the last one deserves a brief explanation. Legally, consideration is an exchange of promises to do or not to do something. For example, a common consideration is money in exchange for services.

The court will not enforce a contract if it considers that one of the parties has been exploited or if there is no evidence of an agreement. To determine whether a contract is enforceable, the court uses eight main criteria:

  1. lack of ability
  2. Obligation
  3. undue influence
  4. Misrepresentation and Confidentiality
  5. unscrupulous
  6. Public order
  7. error
  8. impossibility

here is an articleon unenforceable contracts.

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Examples of an unenforceable contract

The following are the main criteria that the court will use to determine if a contract is unenforceable:

  • Inability:That's what happens in a contract when one party doesn't fully understand what they're agreeing to. It is a form of taking advantage of another person and, if proven, could result in an unenforceable contract. An excellent example is when an agreement is made with a minor or a person with an intellectual disability that prevents them from understanding all the implications of the agreement they are signing. In both cases, the court would not enforce the contract.
  • Obligation:Coercion is when a party is coerced or forced to sign a contract. If proven, the contract would be unenforceable, but there must be evidence to prove the threatening behavior. A good example of coercion in a contract is blackmail.
  • Undue Influence:This refers to one party persuading another party to sign an agreement by taking advantage of their relationship. The court does not tolerate this level of deception and, if proven, would likely result in an unenforceable contract.
  • Misrepresentation:As the name suggests, misrepresentation is when you only tell part of the story in a contract. Suppose the courts find that one of the parties to a contract withheld information about a matter related to the contract. If so, this could result in an unenforceable contract.
  • Confidentiality:Non-disclosure is another form of concealment, but it involves misrepresenting issues related to the default contract. The failure of either party to disclose material information related to the agreement may result in an unenforceable agreement. Typically, in such cases, the courts look at whether the accused party was required to disclose the information or whether the other party could have obtained it in some other way.
  • Immorality:This refers to something in the contract, or in some cases the entire contract, that is so unfair that the contract should not exist as written. The court looks at whether one party has unequal bargaining power, whether one party has difficulty understanding the terms of the agreement (ie, cannot read the language), or whether the contract itself is unfair. In cases of unscrupulous conduct, the declaration of ineffectiveness of the contract is not the only option. The court may choose to enforce part of the contract, the binding parts, and rewrite the other part.
  • Public policy:The contracts that the court considers unenforceable for reasons of public order are intended to protect the company and the parties involved. Even if a contract violates existing state or federal law, the court will not enforce the contract.
    An excellent example of this is areal estate contract. For example, if a landlord in a landlord-tenant dispute forces a tenant to sign a lease that does not allow a medically necessary service animal, this may be considered unenforceable.
  • Error:Sometimes it all comes down to a little mistake. It may be unilateral or mutual mistake, both parties are responsible for it. Regardless, the court will consider whether the issue at issue was significant enough to have a material impact on the settlement. In many cases, the courts require that the error be rewritten in order for the contract to be enforceable.
  • Impossibility:Sometimes contracts are written in a way that would be impossible or impractical to enforce. If something is too expensive, that can be considered sufficient evidence for a decision of impossibility.

here is an articleabout the conditions under which your contract may not be enforceable.

Who can verify the enforceability of a contract?

Many contracts may appear legal, but cannot be legally enforced in court. Therefore, it is important to seek the advice of a licensed professional.Commercial Contract Lawyerbefore signing the contract.

here is an articleabout what a contract attorney does.

How to avoid signing an unenforceable contract

There are two ways to avoid signing an unenforceable contract:

  1. First, seek the advice of a business law attorney. They can check everything before you sign and help you point out potential difficulties.
  2. Evaluate each contract by comparing it to the examples of unenforceable contracts above. Again, the more you know, the better off you'll be.

here is an articleabout what makes a contract binding.

Difference between an unenforceable contract and a void contract

A void contract has no legal title, while unenforceable contracts are valid contracts that cannot be enforced in court due to legal requirements or questions of proof.

here is an articleon unenforceable contracts vs. void contracts.

Get help with an unenforceable contract

If you are concerned about a contract you have signed or think you are about to sign, give us a call. Let us help ease your fears by reviewing them for you.

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