Which factors may make a contract void or voidable?

Which factors may make a contract void or voidable?

• A. It may be illegal or contrary to public policy, relate to a fundamental mistake by both parties, result from misrepresentation, duress or undue influence by one party.
• B. It fails only if payment is late.
• C. It ends only when performance is complete.
• D. It can only be void if all terms are illegal.

Answer: (A)

When a contract can be deemed void or voidable, it’s usually because something went wrong at the moment of formation or with the subject matter itself. The main factors are: illegality or being contrary to public policy, a fundamental mistake shared by both parties about a core aspect of the contract, misrepresentation, or duress or undue influence by one party. If the contract involves illegal activity or violates public policy, it can’t be enforced from the start. If both sides shared a fundamental mistake about what was being agreed or about a basic fact, the agreement may be void. Misrepresentation—where one party’s false statements induced the other to enter the contract—turns the contract voidable, allowing the misled party to rescind or seek damages. Duress or undue influence means consent was obtained through improper pressure or unfair influence, making the contract voidable by the affected party. These are the grounds that genuinely affect validity. Other statements don’t fit: late payment is a breach of contract, not a defect that makes the contract void or voidable; discharge by performance ends the contract when obligations are fulfilled, not because of a void or voidable status; and saying a contract is void only if all terms are illegal misstates how illegality can impact enforceability—often a contract can be void if any unlawful term or subject matter exists, and illegality is not limited to all terms.

When a contract can be deemed void or voidable, it’s usually because something went wrong at the moment of formation or with the subject matter itself. The main factors are: illegality or being contrary to public policy, a fundamental mistake shared by both parties about a core aspect of the contract, misrepresentation, or duress or undue influence by one party. If the contract involves illegal activity or violates public policy, it can’t be enforced from the start. If both sides shared a fundamental mistake about what was being agreed or about a basic fact, the agreement may be void. Misrepresentation—where one party’s false statements induced the other to enter the contract—turns the contract voidable, allowing the misled party to rescind or seek damages. Duress or undue influence means consent was obtained through improper pressure or unfair influence, making the contract voidable by the affected party.

These are the grounds that genuinely affect validity. Other statements don’t fit: late payment is a breach of contract, not a defect that makes the contract void or voidable; discharge by performance ends the contract when obligations are fulfilled, not because of a void or voidable status; and saying a contract is void only if all terms are illegal misstates how illegality can impact enforceability—often a contract can be void if any unlawful term or subject matter exists, and illegality is not limited to all terms.