Also known as:unenforceable contracts · unenforceable agreement
Written by attorneys · grounded in primary & secondary sources — see below
A contract for the breach of which neither the remedy of damages nor the remedy of specific performance is available. The agreement is nonetheless recognized in some other way as creating a duty of performance even without ratification.
Sources & Authorities
How it applies
Common Examples
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Procurement Award Without Formal Contract
The State Facilities Authority sent MetroBuild an award letter selecting it to renovate a public building. Procurement rules required a signed formal contract before any work began, but none was executed. MetroBuild started construction in reliance on the letter and the Authority monitored progress. When the Authority later halted the project, MetroBuild could not recover expectation damages or specific performance because the arrangement qualified as an unenforceable contract, though the Authority still owed a duty recognized through restitution for the value of work performed.
Power Purchase Agreement Lacking Approval
ClearSky Wind LLC and MetroGrid Power Corp. signed a twenty-year power purchase agreement that required prior state utility commission approval. A filing error prevented approval. Both parties built facilities and MetroGrid accepted initial deliveries. When MetroGrid later refused further performance, the court treated the agreement as unenforceable for breach remedies yet still recognized a duty that supported restitution for electricity already supplied.
Select any source to read its text and confirm it supports the definition.
Restatements
Course Outlines
Dictionaries
Epic Systems Corp. v. Lewis584 U.S. __, __ (2018) (slip op., at 8)
Common questions
Frequently Asked
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How does an unenforceable contract differ from a void contract?+
A void contract produces no legal obligation at all. An unenforceable contract creates a duty of performance that the law recognizes in limited ways even though damages and specific performance remain unavailable.
Supporting sources
Can a party recover in restitution when a contract is unenforceable?+
Yes. The law may recognize the agreement as creating a duty in some other way, such as through restitution or quantum meruit, to prevent unjust enrichment even though ordinary contract remedies are barred.
Supporting sources
Does partial performance make an otherwise unenforceable contract fully enforceable?+
No. Partial performance may support restitution for benefits conferred but does not convert the agreement into one that supports expectation damages or specific performance when a required formality such as regulatory approval or a signed writing is missing.
Supporting sources
What role does the Statute of Frauds play in rendering a contract unenforceable?+
Failure to satisfy the Statute of Frauds prevents enforcement by action or defense but does not make the contract inadmissible for other purposes and may still allow restitution when the statute's purpose would not be frustrated.
Supporting sources
171 Cal. Rptr. 604Contracts
…error because the underlying agreement[^9]—at least insofar as it required arbitration of disputes before the A.F. of M.—was an unenforceable contract of adhesion. Two separate questions are thus presented, each of which requires separate consideration: (1) Is this a contract of adhesion? (2) If so, is it unenforceable? A. The term…