Donnelly LLC
Call for a Free Consultation
Toll Free 866-907-6368 Local 856-324-6147

When might a contract be unenforceable?

Contracts are necessary to detail how a business arrangement will be conducted and completed. It is also important to have contracts in case there are any issues about which the participants disagree. A contract dispute can take up significant time and money in settling it. With that, it is important to know under which circumstances a contract might be unenforceable.

Capacity to contract means that the person who formed the contract had the legal ability to do so. If the person is unable to form a contract for a specific reason - mental impairment, age or some other issue - and does not understand the basis of the contract, it can be voided. In general, people who are under 18 are considered minors and cannot enter a binding contract without approval from a guardian.

If there is undue influence, duress or misrepresentation, it makes the contract voidable. Duress occurs if the party indicates that the agreement of the contract came about because of threats of unlawful or wrongful action and there was no option but to agree to the contract. With undue influence, there was unfair persuasion due to a relationship with the other person who was believed to be expected to act in the interests of the person. Misrepresentation is when there is a false statement given, information was withheld, or there was an action to conceal a fact.

If a contract is unconscionable, the terms are unfair. This could mean gross inequality with bargaining power so the damaged party had no option but to agree and it is favorable in an unreasonable way to the other party. Education and literacy are important with determining unconscionability. If there is a violation of public policy or illegal behavior is taking place, the courts can nullify a contract based on public welfare. Finally, the simple fact that there was a mistake in the contract with both parties having made it based on a fundamental assumption as to how the contract was formulated can make it unenforceable.

From the time before the contract is created and after, it is crucial to have legal assistance from a business-centric law firm that has a full understanding of all aspects of a contract.

Source: smallbusiness.findlaw.com, "Will Your Contract Be Enforced Under the Law? -- Enforcement and Contract Defenses," accessed on Jan. 9, 2018

No Comments

Leave a comment
Comment Information

Mount Laurel Office
Mount Laurel Office
403 Birchfield Drive
Suite 403A
Mount Laurel, NJ 08054

Map & Directions

Linwood Office
Linwood Office
327 Central Avenue
Linwood, NJ 08221

Map & Directions

Cape May Court House Office
Cape May Court House Office
618 Route 9 South
Cape May Court House, NJ 08210

Map & Directions

Gloucester, Cumberland and Salem County Offices
Gloucester, Cumberland and Salem County Offices
57 Euclid St.
Woodbury, NJ 08096

Map & Directions

Back To Top