Disaffirmance

DEFINITION of 'Disaffirmance'

The right to renounce a contract and thereby void any legal obligations resulting from the contract. To void the contract, the person must indicate he or she will not be bound by the contract. This can be explicitly expressed by the person in a declaration, or implied when the person performs an act that indicates he will not abide by the terms of the contract.

BREAKING DOWN 'Disaffirmance'

Disaffirmance occurs when a voidable contractual obligation is renounced. Minors or, in some cases, persons who can prove they lacked the capacity to enter a legally binding contract - intoxication, mental incompetence etc. - can disaffirm a contract and therefore avoid all legal obligations set forth in the contract.

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