If the subject is illegal, the contract will not be valid. All of the terms of your contract must not violate any federal or state law. If the formation or performance of the contract requires one of the parties to break the law, the contract is invalid. An enforceable contract is one that can be enforced in a court of law.
That is, the law allows the execution of the contract. An enforceable contract must always be valid. However, a valid contract may not be enforceable. That is, even if all the essential elements of a contract are present, a court will not enforce the contract.
Once both parties have made and signed a contract, it can only be terminated on invalidity grounds. If one of the parties to a contract can be proven to commit fraud, the contract may be unenforceable. Although contracts are signed to minimize the possibility of inter-entity disputes, there are few legal areas that are as plagued by disputes as contracts. If a court rules that a contract is void, it means that the contract has no force or effect, so neither party is bound by it and neither party can rely on it.
A contract can become unenforceable for numerous reasons related to the circumstances of the signing, the terms of the agreement itself, or the events that occur after the signing of the contract. A voidable contract is a valid agreement in which one of the parties has the right to void the contract if they so choose. A void contract is a contract that is not valid and cannot be enforced due to the object or conditions of the contract. Only when the terms of the contract become more detailed and the contract is less routine, should people write them down and indicate their acceptance with a signature.
Company A allegedly committed fraudulent misrepresentation, making the contract unenforceable. It's always best to have an attorney involved in drafting a contract, to avoid more obvious errors and ensure that the language of the contract is clear and complete. Sometimes an agreement needs to be interpreted to see if it is valid or enforceable and if it can be enforced. This can happen if one of the parties decides to annul the contract or if one of the parties was under undue influence when the contract was created.
There are two types of errors in a contract: unilateral (committed by only one party) and mutual errors (committed by both parties). If a contract is found to be unenforceable, the court will not compel one party to act or compensate the other for failing to comply with the terms of the contract. If one party has a special relationship with the other that affects their ability to decide to sign the contract voluntarily, the agreement is unenforceable.