ContractsIntermediateCalifornia Exam

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

Q: What is the difference between a void contract and a voidable contract?

A void contract has no legal effect from inception (e.g., a contract for an illegal purpose). A voidable contract is initially valid but can be cancelled by the injured or disadvantaged party (e.g., a contract signed under duress or by a minor).

AThere is no difference; the terms are interchangeable, per standard contingency and disclosure practice

BA void contract has no legal effect from the start; a voidable contract is valid but can be cancelled by one partyCorrect

CA void contract can be ratified; a voidable contract cannot, under standard California purchase contract terms

DVoid contracts involve real property; voidable contracts involve personal property, as typically drafted in a residential purchase agreement

Why A void contract has no legal effect from the start; a voidable contract is valid but can be cancelled by one party Is Correct

Answer B: A void contract has no legal effect from the start; a voidable contract is valid but can be cancelled by one party

A void contract has no legal effect from inception (e.g.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

Purchase Agreement

A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.

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Key Terms to Know

Purchase Agreement

A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.

Earnest Money

A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

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