There are many reasons a contract can be unenforceable in a court of law. Contracts are a fundamental part of business and personal transactions, providing a legal framework for agreements between parties. However, not every contract is legally enforceable. Because of this, it’s important to understand how to avoid these issues when entering into an agreement.

Lack of Capacity

A basic element of a contract is that all parties must have the legal capacity to enter into an agreement. Contracts entered into by individuals under the age of 18 are often unenforceable unless the contract is for necessities.

If a party lacks the mental ability to comprehend the contract’s terms due to illness or disability, the contract may be voidable. The same idea also applies if one party was under the influence of drugs or alcohol to the extent that they could not understand the nature of the agreement.

Duress or Undue Influence

Parties must enter into a contract voluntarily. If one party forces or pressures the other into signing, the contract could become unenforceable. Two common reasons for this are duress and undue influence. Duress happens when one party coerces another into signing through threats, violence, or unlawful pressure. The coerced party can generally void contracts signed under duress.

Undue influence happens when one party takes advantage of a relationship to manipulate the other into agreeing to the contract. For example, if a caregiver manipulates an elderly person into signing over their property, the contract could be unenforceable.

Misrepresentation or Fraud

Contracts based on false or misleading information are unenforceable. If one party provides inaccurate or incomplete information, the other party may sign the agreement under false pretenses. Misrepresentation can take different forms:

• Fraudulent Misrepresentation: If one party intentionally lies or conceals critical facts, the other party can void the contract.
• Negligent Misrepresentation: Even if the misrepresentation was not intentional, a contract could be unenforceable if one party failed to verify key facts before making promises.

In these cases, the affected party may seek to void the contract and pursue damages if they suffered losses due to the fraud or misrepresentation.

Illegality

A contract must be for a lawful purpose to be enforceable. If the subject matter of the contract involves illegal activities, the contract is void and unenforceable from the start. Courts will not enforce contracts that require the performance of illegal acts or are for an illegal purpose.

A contract can also be unenforceable if it violates public policy, even if the terms are not illegal. Courts may refuse to enforce contracts that are against the interests of society, such as agreements that restrict trade, waive fundamental rights, or promote unethical behavior.

For example, a non-compete agreement that unfairly restricts a former employee’s ability to find new work in their field could be struck down for violating public policy.

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OKC Business and Contract Attorneys

There are many Reasons a Contract is Unenforceable in Oklahoma. From issues of capacity and consent to misrepresentation, illegality, and unfairness. When entering into a contract, it’s important to ensure that all parties fully understand the terms and legal standards. If you suspect a contract may be unenforceable, consulting with a Oklahoma City business law attorney can help clarify your rights and protect your interests.

If you need help understanding whether or not a contract is valid, our contract team at Kania Law – OKC Attorneys can help. Call us today at 405-367-8710 or ask a question online.