What is a voidable contract?

A voidable contract is a legally binding contract that can be canceled or voided by one or more of the parties involved. In North Carolina, a contract is voidable if it was entered into under circumstances in which one or more of the parties did not have the capacity to contract, were under the influence of drugs or alcohol, were defrauded, or were under duress or coercion. In a voidable contract, one or more of the parties involved is able to choose whether to keep the contract in effect or to terminate it. However, the other parties to the contract must abide by the decision the party making the choice has made, even if it means the contract is voided. If the choice is to terminate the contract, any exchanged items or funds must be returned to the appropriate parties. Voidable contracts are different from void or unenforceable contracts, which are not legally binding in North Carolina because they involve illegal activities or were never properly formed in the first place. It is important to learn the differences between the two before entering into contractual agreements in order to ensure that both parties are protected.

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What is a voidable contract?

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