Also known as: voidable agreements · voidable contract
Written by attorneys · grounded in primary & secondary sources — see below
A contract that one or more parties possess the power to avoid through a manifestation of election or to affirm through ratification that extinguishes the power of avoidance.
Vance Vogel, age seventeen, obtained a high-interest loan from Vitality Foods to finance cryptocurrency trades after falsely checking a box stating he was eighteen. After losing the funds, Vance promptly notified the lender that he disaffirmed the agreement. The lender sued for the remaining balance. Because Vance was a minor at formation, he retained the power to avoid the contract and his timely election prevented enforcement.
Victoria Vernon retained an agent under a voidable services agreement that she later avoided on grounds of incapacity. The agent had already performed substantial work before the avoidance election. Victoria became liable to the agent only to the extent she had been unjustly enriched by those services.
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A voidable agreement remains valid and enforceable until the protected party elects to avoid it or ratifies it. A void contract is a nullity from the outset with no legal effect. The distinction matters because a voidable contract can be ratified while a void contract cannot.
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Ratification occurs when the protected party manifests an election to affirm the contract, such as by accepting and retaining benefits tied to the agreement over an extended period without objection. Such conduct extinguishes the avoidance power even if the initial formation was defective.
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No. A minor may still avoid the contract despite misrepresenting age because the policy protects minors from improvident bargains even when an innocent adult party is misled. The lender's inability to verify age does not cure the capacity defect.
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A beneficiary's rights are subject to any formation defect that rendered the contract voidable at inception. The beneficiary steps into the shoes of the promisee and cannot enforce rights the promisee could not enforce.
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