Void vs. Voidable

Valid, void, voidable, unenforceable

Contract questions get easier when you sort the four labels first. A valid contract has all the required elements and can be enforced. A void contract is missing something so fundamental that it never came into existence, which is why courts cannot enforce it or fix it. A voidable contract is valid when it is made, but one of the parties has the right to cancel it. An unenforceable contract is valid in form yet cannot be enforced, most often because of the statute of frauds or the statute of limitations.

What makes a contract void

A contract is void when the law refuses to recognize it at all. Common causes are an unlawful purpose, a party who lacks the capacity to contract in any sense, or a promise about something the promisor has no power to deliver. The property example is the one exam writers favor: a seller who signs a contract to sell a house they do not own has made no promise the law will enforce, and no signature or later agreement can revive it.

What makes a contract voidable

A voidable contract exists and binds both sides until the protected party decides otherwise. The triggers are the situations where one side's judgment or freedom to say no was compromised: minority status, intoxication, fraud or misrepresentation, duress, undue influence, and mental incapacity that has not been formally adjudicated. The protected party can disaffirm the contract, which means cancel it and return to the position they were in before, or they can ratify it, which means keep it alive. Silence alone usually does not count as ratification, but accepting benefits after the impediment is gone can.

Who gets the choice

This is the detail that separates correct answers from plausible ones. On the exam, the choice belongs to the party the law is protecting, not to the party who dealt with them. A seller who discovers the buyer was a minor cannot cancel and keep the earnest money; the minor or their guardian decides. The only limits on that choice are timing (the right can lapse) and the requirement that the disaffirming party return what they still have.

How this appears on the exam

Read the scenario for the status of the parties and the source of the problem. No power to perform, an illegal purpose, or a promise about a nonexistent property interest points to void. A minor, an intoxicated signer, or someone who signed because of fraud or threats points to voidable, and if the question asks what remedy undoes it, the answer is rescission.