A voidable contract, as the name suggests, is a legal agreement that can be canceled or voided by one or both parties involved. The cancellation of this contract can happen due to certain conditions such as misrepresentation, fraud, undue influence, or mistake.
Let us understand this with the help of a few examples.
Example 1: Misrepresentation
Suppose you want to sell a car to someone and you market it as being in perfect condition. Additionally, you tell them that the car has never been in an accident, when in fact, it has been in one minor collision. In such a scenario, the potential buyer believes your statement to be true and purchases the vehicle. Later on, if the buyer discovers your misrepresentation, they can choose to void the contract and ask for their money back.
Example 2: Fraud
Suppose you receive a call from someone representing themselves as your long-lost relative. This person informs you that they are in dire need of money and ask you to lend them some. To win your trust, they provide you with false identification proof. You fall for their trap and lend them a significant amount of money. Later on, you realize that it was a fraud, and the person was not your relative. In such a scenario, you can choose to void the contract and ask for your money back.
Example 3: Undue Influence
Suppose you are old, and you live alone. Your neighbor, who is also your caretaker, is the only person you have for assistance. The neighbor starts to take advantage of your situation and convinces you to sell your house to them at a very low price. They use their position to influence you and make you feel like you have no other choice. In such a scenario, you can choose to void the contract as their behavior was unethical and manipulative.
Example 4: Mistake
Suppose you are a business owner, and you are looking to purchase new equipment to expand your business. You find a supplier that has what you are looking for and agree on a price. However, after the transaction, you realize that you made a mistake and could have purchased a similar piece of equipment at a much lower price from another supplier. In such a scenario, you cannot void the contract merely because you made a mistake. However, if there was a mistake in the contract`s terms that you agreed to, then you can choose to void the contract.
In conclusion, a voidable contract is a legal agreement that can be canceled by one or both parties involved due to certain conditions being met. The examples mentioned above can help you understand better what constitutes a voidable contract. It is essential to take the help of a legal professional to understand the legality of a contract and to know your options for voiding it.
