Question

Explain in detail what is meant by: "unenforceable contracts." Do not simply give me the textbook definition. You must explain an unenforceable contract in detail.

Answer 1

An unenforceable contract is a contract which is not valid in the court of law. An unenforceable contract is a result of

• Ambiguous nature of contract terms
• One party with a voidable claim to contract
• Public policy limitations

Examples :

• The capacity of party entering into a contract - Minors involved in contracts make it unenforceable
• Undue Influence / Duress - Suppose one party makes you sell your house and agree to a contract at gunpoint or if you sign a contract under influence of alcohol
• Impossibility - Assume you contracted to supply 100 cycles for a race in a week's time. A hurricane destroyed your manufacturing plant and it is impossible for you to deliver. Other party cannot enforce the contract due to the impossibility of performance.
• Misrepresentation - A sells a car to B saying that car has not had even one accident. B buys on this fact and later realizes the car had been repainted due to a major accident.B refuses to pay A balance payment for the car. The contract is unenforceable as A committed a fraud by misrepresenting car condition to B.
• Public Statutes - Certain contracts or States have a defined period for filing a lawsuit and rendering a contract unenforceable. For example - You entered into a contract with X to purchase a house 5 years ago and observed a small leak in the house back then. You did not complain to X about the problem and signed contract. After 5 years, the house walls collapse due to leakage and you decide to file a lawsuit against X. Court would render the contract unenforceable due to delay by you considering Doctrine of Laches.