What is a key difference between a void contract and a voidable contract?

A void contract and a voidable contract each serve distinct purposes in legal terms. A void contract is typically one that lacks essential elements needed for validity, such as mutual consent, a lawful object, or consideration, making it unenforceable right from the outset. It’s as if the contract never existed in a legal sense.

On the other hand, a voidable contract is one that is valid and enforceable until one party chooses to cancel it due to circumstances such as misrepresentation, undue influence, or being a minor. Essentially, while a voidable contract initially confers rights and obligations, a party with the option to void the contract can choose to uphold it or rescind it.

Recognizing this distinction is essential for understanding how different contracts operate within real estate transactions and how the rights of parties may shift based on the nature of the contract they are involved with.