What is a voidable contract?

A voidable contract is defined as an enforceable agreement that can be set aside by one or more parties under certain circumstances. This means that while the contract is valid and legally binding at its inception, a party has the option to void or cancel the contract if specific conditions are met, such as misrepresentation, undue influence, or coercion.

In contrast to the other choices, a voidable contract is not devoid of all legal effectiveness; rather, it is enforceable until the affected party decides to take action to void it. The nature of this type of contract hinges on the right of one party to choose to affirm or reject the contract based on the presence of certain legal defects. This flexibility distinguishes voidable contracts from void contracts, which are never enforceable from the beginning.

Other options present misunderstandings about the nature of obligations within contracts. For instance, a binding agreement that cannot be altered describes a different type of contract which lacks the premise of voiding by parties. Similarly, a contract that is always unenforceable refers to a void contract, which, unlike a voidable contract, lacks legal effect from the start. Lastly, a verbal agreement made without written formality might not constitute a valid contract depending on the jurisdiction and the specifics of