To follow up on yesterday’s discussion on contracts, it seems fitting to write about the ways in which contracts can be ineffective. There are three main ways in which this can happen; void contracts, illegal contracts and voidable contracts.
Void Contracts: a void contract is one which never existed at all. For example, where two parties seek to make a contract where there is a mutual or common mistake (a contract for the purchase and sale of a lakefront home, which both parties didn’t know had burned down), the resulting contract will be void.
Illegal Contracts: are those that offend against public policy or against a particular law or statute. For example, a contract for murder would be an illegal contract. Illegal contracts are also void.
Voidable Contracts: are those where one party has the option to rescind or cancel the contract. However, until it is rescinded, the contract is binding on both parties. For example, the purchase of a car by an infant (the infant would have the option to rescind).
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