What does 'voidable' mean in a contractual context?

In a contractual context, 'voidable' refers to a situation where a contract is valid and enforceable but can be legally rejected or denied by one of the parties involved. This means that one party has the option to either affirm or rescind the contract due to certain circumstances, such as misrepresentation, undue influence, or a lack of capacity.

For instance, if a party involved in the contract was not of legal age or if there was a significant misunderstanding between the parties, they have the legal right to void the contract, meaning they can cancel it without facing legal penalties. This characteristic distinguishes 'voidable' contracts from 'void' contracts, which are inherently invalid from the outset and cannot be enforced by either party. The definition reinforces the importance of consent and fairness in contractual agreements.