Contracts and Sales Multistate Bar Practice Exam

Which of the following best describes a void contract?

1. A contract that can be enforced if a party chooses

2. A contract that has valid terms but is unenforceable

3. A contract without legal effect from the beginning

4. A contract that can be ratified by one party

The correct answer is: A contract without legal effect from the beginning

A void contract is defined as one that has no legal effect from the very beginning, meaning it is treated as if it never existed in the eyes of the law. This can arise for various reasons, such as the subject matter being illegal or the parties lacking the capacity to contract. Because there is no valid agreement to begin with, neither party can enforce any obligations under such a contract, nor can it be ratified or enforced in the future. In contrast, the other options describe different scenarios regarding contractual obligations. A contract that can be enforced if a party chooses refers to a voidable contract, which is valid until a party decides to void it. A contract that has valid terms but is unenforceable generally indicates issues such as lack of proper form or statute of limitations, labeling it unenforceable but still existing. Lastly, a contract that can be ratified by one party is also a characteristic of a voidable contract, as it allows one party the option to affirm or reject the contract's validity. Thus, the defining feature of a void contract is its complete lack of legal effect from the outset, which is captured accurately in the chosen answer.