Skip to content
× FreshBooks App Logo
Official App
Free - Google Play
Get it
You're currently on our US site. Select your regional site here:

Business Contracts

  1. Defeasance
  2. Grandfather Clause
  3. Hold Harmless Clause
  4. Voidable Contract
  5. Cooperation Clause
  6. Capital Commitment
  7. Escrow

Save Time Billing and Get Paid 2x Faster With FreshBooks

Try It Free ➝

Voidable Contract: Definition & Example

Updated: November 22, 2022

In both personal and professional instances, there are going to be various types of contracts to enter into. In a business sense, some of these include a nondisclosure agreement or a partnership agreement. It could also be a general employment contract or an indemnity agreement. The point is that entering into a contract happens frequently. 

But what happens if you want to get out of a contract? Is there a legal way to do this? The answer is yes. A voidable contract is one way to do it but there are some specifics to be aware of. Read on to learn how voidable contracts work, some examples, and much more.

List IconTable of Contents


    • A contract is voidable if it can be terminated or changed for certain legal justifications.
    • Not all contracts are voidable; there must be a legal precedent to release parties from obligation.
    • A frequent technique to terminate a contract is to discover a flaw in it.
    • It is easiest to nullify a contract if all parties concur that doing so is the wisest course of action.

    What Is a Voidable Contract?

    A voidable contract is a formal contract between two parties that could become void on a variety of legal grounds. A voidable contract is initially viewed as legitimate and binding but may be revoked by one party if it is shown to contain flaws.

    Disaffirmance is the legal option to void such a contract.

    Fresh Starts Deserve FreshBooks

    When Is a Contract Voidable?

    A contract may be voidable for a number of reasons. These reasons include:

    • Failure to disclose a crucial fact by one or both parties
    • A blunder, false statement, or scam
    • Excessive pressure or coercion
    • Legal ineligibility of one party to enter a contract (e.g., a minor)
    • A term or phrase that is offensive
    • A breach of contract

    How Do Voidable Contracts Work?

    The agreement is nonetheless enforceable and legal if a party with the authority to reject it chooses not to do so notwithstanding the flaw.

    Agreeing to a voidable contract in which one party fails to identify the misrepresentation or fraud perpetrated by the other party typically only has a negative impact on that party.

    Get A Headstart On Your Accounting

    Voidable vs. Void Contracts

    When one of the relevant parties would not have initially accepted the contract if they had known the real nature of all of its components prior to initial acceptance, the contract is voidable. The aforementioned party shall have the right to reject the contract after the fact upon the presentation of new information. A contract may also be voidable if one or both parties were not of legal age to enter into it, such as when one party is a juvenile.

    A void contract, on the other hand, cannot be enforced at all. A contract may be void if it requires one or both parties to engage in criminal activity or if one party becomes unable to fulfill the contract’s obligations, such as in the case of one person’s death.

    A contract that is declared to be voidable may be amended through the ratification procedure. For a contract to be ratified, the parties concerned must concur on new terms that, in essence, resolve the underlying issue of conflict that existed in the original contract.

    For instance, a party may decide to ratify the agreement once they are judged legally capable if it is later determined that they were unable to enter into a binding agreement when the original was approved.

    Examples of a Voidable Contract

    Examples of contracts that are voidable include a contract involving a minor. Although minors are able to sign contracts, they are also free to choose to break them without facing any consequences. Other participants, such as those who lacked the necessary mental ability, were intoxicated, or were under the influence of narcotics at the time the contract was drafted, are also ineligible to enter into a binding agreement. 


    A contract must be legally binding, consensual, and have a stated consideration in order to be legally enforceable. This document, which represents the exchange of value between the parties, must be signed by two adults who are of sound mind and intend to abide by the contract terms.

    A contract that has the potential to be voided is one that cannot be upheld.

    Skip The Crash Course In Accounting

    FAQS on Voidable Contract

    Are All Contracts Voidable?

    Not all contracts are voidable; there must be a legal precedent to release parties from obligation.

    Can a Voidable Contract Be Enforced?

    A contract that is null and invalid cannot be enforced and is simply ineffective.

    What Causes a Contract to Be Voidable?

    There are a number of causes for a contract to be voided, mostly due to illegal conduct. For example, the contract will be voidable on the grounds of misrepresentation if one party made a false statement that convinced the other party to sign it as stated by contract law.


    553 HRS


    $ 7000




    Try It Free for 30 Days. No credit card required. Cancel anytime.