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What issues might make a contract unenforceable?

Whenever you enter into an agreement, it's important consider whether that agreement is enforceable in court. Otherwise, it's hardly worth the paper it's written on -- or isn't.

The first thing to consider is whether you have a valid contract. The basics of a valid contract include:

  • A meeting of the minds of the contracting parties resulting in an offer and acceptance of that offer
  • A bargained-for exchange of promises, meaning that "consideration" (something of real value) was given by each party
  • Sufficient definition of the terms and conditions for court to enforce them

In certain cases, the agreement must be in writing and some even require legal representation. In New Jersey, examples include lending or credit contracts of more than $100,000, real estate agreements, prenuptial or matrimonial agreements, and certain interpersonal agreements.

Even if the law does not require the contract to be in writing, however, you should get it in writing. Otherwise, any attempt at enforcement will require proof that there was a contract, when it was made and what the terms were, and this can be very difficult -- especially if the parties disagree.

Even valid contracts can be void or voidable

There are certain situations in which even a valid contract may be legally void. For example, a contract that is unconscionable, involves illegality or goes against public policy would not be enforced by the courts.

In other situations, a party to the contract may have a defense to its enforcement. In such a situation, the contract may be voidable by that party. For example, minors under 18 lack the legal capacity to enter into contracts. Or, a party may claim they were subject to duress, undue influence or misrepresentation when making the agreement.

In some situations, a material mistake may have been made when the parties were entering into the agreement. If one party, although they had read the contract, truly did not understand what they were agreeing to, this may make the contract invalid because there was no meeting of the minds between the parties. If both parties were mistaken about a basic assumption or key fact when they entered into the agreement, that mistake may make the contract voidable by either party.

It's important to note that there is no defense when one party fails to read the contract and later discovers unfavorable terms. Contract law assumes both parties are fully aware of what is involved in the agreement.

If you have questions about whether a particular agreement will stand up in court, consult with an attorney familiar with contract law or the area of law covered by the contract.

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