voidable contract

  

Definition

A contract that has legal effect and force when it is made, but is liable to be subsequently annulled or set aside by the courts through the process of rescission.

Circumstances or features that make a contract voidable include (1) non-disclosure of one or more material facts, (2) misrepresentation, (3) mutual mistake, (4) lack of free will of a contracting party, or presence of one contracting party's undue influence over the other, and (5) a material breach of the terms of the contract. A contract that is voidable in only one or few parts may be saved by the process of severance. Not to be confused with void contract.


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