Contracts are essential agreements that help to ensure that everyone involved receives what they expect. There are two main types of contracts: valid and voidable, and people use them for several reasons, including business deals, renting property, or creating a partnership. A voidable contract is a popular type of contract that can get voided by one or more parties at their discretion.
Understanding voidable contracts
A voidable contract is an agreement between two or more parties that can get canceled by one of the parties if certain conditions are not met. This type of contract provides a legal way to exit the agreement without breach of contract issues, unlike a breach of contract involving legal action and potential penalties.
When might a contract be considered voidable?
The most common reason for a contract to be voidable is when one party has misrepresented themselves or the terms of the agreement. For example, if one party lies about their qualifications or experience to get a job, that would be grounds for the other party to cancel the contract. Other reasons for breach of contract issues might include breach of trust, breach of warranties or breach of fiduciary duty.
What happens after a voidable contract gets voided?
After the contract has been voided, both parties are no longer bound by its terms and conditions. The aggrieved party may be able to seek compensation for any losses or damages incurred due to the breach of contract. Alternatively, the parties may choose to renegotiate the terms of the agreement or come to an amicable solution outside of court.
A voidable contract provides a way for people to exit agreements without breach of contract issues, and it allows for parties to renegotiate the terms of their agreement. It is important to remember that breach of trust, breach of warranty or fiduciary duty can all be valid reasons for voiding a contract.