A contract is more than a piece of paper signed by two or more parties. It is a legally enforceable agreement. So, what can make a contract unenforceable?
Mistakes
All contracts need at least the following elements to be enforceable:
- An offer and acceptance of that offer,
- A specific subject or purpose, and
- Consideration.
Sometimes mistakes happen in contracts. Some can cause the contract to be unenforceable, especially if the mistake involves one of the major components of the contract.
Perhaps two parties, Bob and Dan, sign an ambiguous document they handwrote and called a contract. However, though their grammar was perfect, and the document was legible, the subject of the contract was vague. Bob thought he was going to provide raw lumber for Dan’s construction project, while Dan thought Bob was providing a polished finished product. They also left the consideration blank. This contract very likely might be difficult to enforce.
Undue Influence
A party may be pressured into signing a contract. If so, the contract may be unenforceable because that individual did not voluntarily enter into the contract.
For example, Bob wants Dan to sign a contract. He gets Dan into a small office, locks the door, then talks about how awful it would be if something happened to Dan’s family. Dan might sign the contract just to get out the door. Yes, this is an over-the-top example, but pressuring someone to sign a contract can be done openly or in subtle ways. Either way, the contract could be unenforceable.
Lack of Capacity
All the parties to a contract must be able to understand what they are signing. Otherwise, the contract could be unenforceable because they lack the capacity to make a decision. Lack of capacity could be caused by illness, age, or substance abuse, to name a few.
For example, Bob has Dan’s 16-year-old son, Jordan, sign a contract that states Jordan will paint Bob’s offices for a pittance. However, since Jordan is a minor and lacks capacity, the contract is unenforceable.
Misrepresentation, Fraud, or Nondisclosure
When a party to a contract fails to state important information about the agreement, the contract could be considered unenforceable.
As an example, consider a deal Bob struck with Dan. Bob agreed to sell Dan some of his equipment for what appeared to be a decent price. However, although Bob stated he owned the equipment, he was only leasing it. That could be considered fraudulent misrepresentation because Bob knows that he is making a false statement. In addition, some of the equipment is not working properly, a fact that Bob fails to disclosure. The contract Bob and Dan signed could be struck down as unenforceable.
Have an Attorney Review Your Contracts.
The attorneys at Virtus Law use their experience to assist clients with their contracts. To discuss your concerns with one of our attorneys, please call 612.888.1000. Our main office is in Minneapolis, with other offices located in Maplewood, Cambridge, Edina, Mendota Heights, and Red Wing.
