ContractsIntermediateCalifornia Exam

What is the effect of 'fraud in the inducement' on a contract?

AThe contract is void from the start

BThe contract is voidable by the defrauded partyCorrect

CThe contract is fully enforceable despite the fraud

DOnly the fraudulent clause is unenforceable

Why The contract is voidable by the defrauded party Is Correct

Answer B: The contract is voidable by the defrauded party

Fraud in the inducement means one party was deceived into entering the contract. This makes the contract voidable (not void) — the defrauded party may choose to rescind or affirm the contract.

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.