Nevada Timeshare License Practice Exam

Which scenario describes a voidable contract?

1. A contract signed by a minor

2. A contract with clear terms

3. A contract enforced by courts

4. A standard timeshare agreement

The correct answer is: A contract signed by a minor

A contract signed by a minor is considered a voidable contract because individuals who are under the age of majority (typically 18 years old in many jurisdictions) lack the legal capacity to enter into binding contracts. This means that the minor has the right to affirm or void the contract at their discretion. They can choose to ratify the contract once they reach adulthood, or they may void it entirely while still a minor or within a reasonable time after reaching adulthood. In contrast, a contract with clear terms involves clarity and mutual understanding between parties, which does not inherently relate to the concept of voidability. Similarly, a contract enforced by courts signifies that it is valid and recognized legally, while a standard timeshare agreement refers to a typical arrangement in vacation ownership and does not address the legal capacities of the parties involved. Therefore, the most accurate representation of a voidable contract among the options provided is the scenario involving a minor.