As a professional, I know that understanding the difference between an unenforceable contract and a voidable contract is crucial. Both types of contracts are legally different and can have significant consequences for the parties involved.
An unenforceable contract is a contract that cannot be enforced by law. This can be due to some defect in the formation of the contract or because the contract’s terms violate some legal requirement. For example, a contract that violates a statute or is against public policy may be unenforceable. Even if both parties agree to the terms, the contract will still be considered unenforceable.
On the other hand, a voidable contract is a contract that is valid, but one party has the right to cancel or avoid it due to some legal grounds. This could be because one party was coerced or misled into signing the contract, or because one party lacked legal capacity to enter into the contract. In a voidable contract, the contract remains valid until the party with the right to cancel chooses to do so.
The consequences of both types of contracts are quite different. In an unenforceable contract, neither party can enforce the contract. This means that if a dispute arises, neither party can go to court to seek a remedy. The contract is simply not valid, and both parties will have to come to an agreement on their own.
In contrast, in a voidable contract, one party has the right to cancel the contract. If that party chooses to cancel, then the contract becomes void ab initio, meaning the contract is void from the very beginning. The other party cannot enforce the contract, and neither party has any further obligations under the contract.
In conclusion, it is essential to know the difference between an unenforceable contract and a voidable contract. An unenforceable contract is simply not valid, whereas a voidable contract is valid until one party chooses to cancel it. Understanding the implications of each type of contract can help parties to avoid unnecessary legal disputes and reach agreements that are enforceable under the law.