Also known as: void contract · void contracts · voidable contract · voidable contracts · void and voidable contract · nullity of contract · avoidable contract
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A contract that produces no legal relations from the moment of formation because a party lacked any capacity to incur contractual duties. The absence of capacity means no agreement arises that a court will recognize or enforce. Subsequent conduct cannot create or affirm duties under such an agreement.
A contract that produces no legal relations from the moment of formation because a party lacked any capacity to incur contractual duties. The absence of capacity means no agreement arises that a court will recognize or enforce. Subsequent conduct cannot create or affirm duties under such an agreement.
A contract is void when a court has adjudicated a person incompetent and placed property under guardianship before the transaction. The ward then lacks any capacity to incur contractual duties, so no agreement arises. Apparent understanding or later conduct cannot create an enforceable contract.
A contract that one or more parties may avoid by manifesting an election or may affirm by ratification to extinguish the power of avoidance. The power arises when a party possesses capacity to form an agreement yet holds a recognized basis for disaffirmance. Ratification occurs through conduct that treats the contract as binding.
Vanessa Vega, age seventeen, signed a one-year apartment lease with UrbanGate Properties. Four months later she moved out, notified the landlord of her disaffirmance, and demanded return of her security deposit. UrbanGate sued for unpaid rent and the early-termination fee. The court held the lease voidable at Vanessa's option and dismissed the claim for future payments.
A contract that one or more parties may avoid by manifesting an election or may affirm by ratification to extinguish the power of avoidance. The power arises when a party possesses capacity to form an agreement yet holds a recognized basis for disaffirmance. Ratification occurs through conduct that treats the contract as binding.
Each sense below has its own examples, sources, and questions.
Maya, who had a court-appointed guardian with exclusive authority over litigation decisions, signed a contingency-fee agreement with attorney Lopez without the guardian's involvement. The guardian later objected and refused to honor the agreement. Lopez sought enforcement. The court treated the agreement as lacking legal effect against the guardian's objection.
Ratification extinguishes the power of avoidance when a party manifests an election to affirm the contract. Acceptance and retention of benefits connected to the agreement for an extended period without objection constitutes such ratification. Once ratified, the contract becomes fully enforceable.
A minor's contract is voidable at the minor's option rather than fully binding. The minor may enforce the agreement if beneficial or disaffirm it before or within a reasonable time after reaching majority. Understanding the terms does not remove the power to avoid.
A third-party beneficiary's rights remain subject to any formation defect that renders the contract voidable. The beneficiary steps into the shoes of the promisee and cannot enforce rights the promisee could not assert. Subsequent performance by the promisee does not cure the original infirmity for the beneficiary's benefit.