Voidable Contract
 |
Definition of 'Voidable Contract'A formal agreement between two parties that may be rendered unenforceable for a number of legal reasons. Reasons that can make a contract voidable include failure by one or both parties to disclose a material fact; a mistake, misrepresentation or fraud; undue influence or duress; one party's legal incapacity to enter a contract; one or more terms that are unconscionable; or a breach of contract. |
 |
Investopedia explains 'Voidable Contract'A voidable contract can be legally rejected by one party and is said to have a defect. If the party with the power to reject the contract chooses not to reject the contract despite the defect, the contract becomes valid and enforceable.It is usually only one of the two parties who would be adversely affected by agreeing to a voidable contract if they had recognized the misrepresentation or fraud made by the other party. For example, the first party would not have agreed to the contract originally and has the opportunity to reject it after the fact. In contrast, a void contract is inherently unenforceable. An example would be a contract that violates the law, such as a murder for hire contract. |
Related Definitions
Articles Of Interest
-
Understanding Your Insurance Contract
Learn how to read one of the most important documents you own. -
Moral Hazards: A Bump In The Contract Road
Learn how this phenomenon can cause a party in an agreement to behave differently than expected. -
Create A Pain-Free Postnuptial Agreement
This marital contract can underline your love for each other - not undermine it. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street
From godfathers to perps, familiarize yourself with the "criminal elements" creeping around Wall Street. -
The Copper King: An Empire Built On Manipulation
Find out how Yasuo Hamanaka's actions in the copper market forever changed the rules for commodity traders. -
Playing The Sleuth In A Scandal Stock
Learn the legwork involved in finding out whether your investment can weather a storm. -
Defining Illegal Insider Trading
The better you understand why insider trading can be criminal, the better you'll understand how the market works. -
The Pioneers Of Financial Fraud
These fraudsters were the first to commit fraud, participate in insider trading and manipulate stocks. -
How To Safeguard Your Tax Returns From Identity Theft
Identity thieves love tax season. In 2012, there were 13 million victims of identity theft. As easy as it is for thieves to steal your information, there are also simple measures you can take ...
Free Annual Reports