Nevada Timeshare License Practice Exam

Which term best describes a contract that can be affirmed or rejected by one party?

1. Unenforceable contract

2. Void contract

3. Voidable contract

4. Enforceable contract

The correct answer is: Voidable contract

A voidable contract is a type of agreement that remains valid and enforceable until one of the parties opts to void it. This means that the affected party has the right to either affirm or reject the contract based on certain conditions, such as misrepresentation, undue influence, or lack of capacity. For instance, in a situation where one party enters into a contract while under duress, that party can choose to void the contract, thereby making the agreement voidable. This characteristic allows the party to protect their interests if they believe the contract was formed under unfavorable or unfair circumstances. In contrast, an unenforceable contract lacks the necessary elements to be legally upheld, while a void contract is one that is not recognized by law and cannot be enforced from the beginning. An enforceable contract, on the other hand, is one where both parties are legally bound to the terms agreed upon, without the option for one party to reject it at their discretion.