What does it mean if a contract is voidable?

When a contract is described as voidable, it means that one party has the right to reject or cancel the contract while the other party must honor its terms unless the party with the right to void it chooses to enforce it. This typically occurs in situations involving issues like misrepresentation, undue influence, or the inability of one party to provide informed consent at the time the contract was formed.

In these circumstances, the party with the option to void the contract can decide whether to proceed with the agreement or to cancel it completely, allowing for flexibility and protection against unfair circumstances. The contract remains valid until the aggrieved party decides to void it, making this an important distinction in contract law.

The other options describe scenarios that do not accurately reflect the nature of a voidable contract. A contract that is legally valid and binding would not be voidable, while a completely invalid contract lacks legal standing from the outset and cannot be enforced by either party. Therefore, the essence of a voidable contract lies in its potential to be rejected by one party, distinguishing it from contracts that are simply void or invalid.