Simply coming to a written agreement with another party does not mean that a person has entered a legally binding contract with them. While business agreements in Pennsylvania are largely dependent on the presence of contracts, it is important to ensure that those contracts are legally enforceable in a court of law. Knowing what makes a contract unenforceable is an important part of only creating a legally binding agreement between parties.
Lack of capacity
In legal terms, the word “capacity” simply means the mental ability to understand and be held accountable for meeting the terms of the contract in question. A contract can be deemed unenforceable if either of the parties who signed the agreement was underage, under the influence or mentally incapable of understanding the terms of the contract at the time of signing it. Anything that would hinder someone’s ability to comprehend the contract’s terms and their responsibilities in relation to it would make the contract unenforceable.
Undue influence or duress
Any person who signs a contract in order to protect themselves against threats of physical harm has signed the contract under duress. Undue influence is different as it is usually the case when a person who has authority over the party signing the contract uses that authority to manipulate them into signing it. Both of these cases render a contract unenforceable as legally binding contracts can only be signed by parties who are doing so by their own free will.
Fraud or misrepresentation
If someone signs a contract under fraudulent means, it simply means that they have been deprived of the accurate information needed to sign the contract with the full understanding of everything involved in it. Misrepresentation, while similar to fraud, means that someone signs a contract based on an untrue statement of fact that leads to them signing the contract. Both of these elements can cause a contract to be unenforceable as a legally binding contract can only contain factual information about the agreement that is being signed.
One way to ensure that a contract is enforceable is to rely on the services of an attorney who is familiar with contract litigation and disputes. This lawyer may help ensure that every aspect of the contract process is performed within the framework of a state’s contract laws.
