Unenforceable Agreement Definition
An unenforceable agreement is a type of contract that is not legally binding. It may be deemed unenforceable for various reasons, such as violation of public policy, lack of consideration, or unconscionability. In this article, we will delve deeper into the definition of an unenforceable agreement and explore some of the common causes of unenforceability.
Definition of unenforceable agreement
An unenforceable agreement refers to a contract that cannot be enforced by law. This means that if a party breaches the terms of the agreement, the other party is unable to take legal action to enforce it. Unenforceability may arise due to a variety of reasons, and can be frustrating for parties who thought they had a legally binding agreement.
Causes of unenforceability
1. Violation of public policy
An agreement that contravenes public policy may be deemed unenforceable. Public policy refers to the underlying principles that govern society and are considered to be in the best interest of the public. For instance, an agreement that promotes illegal activities or goes against fundamental human rights may not be enforceable in court.
2. Lack of consideration
Consideration refers to the payment or benefit exchanged between parties in a contract. If one party fails to provide consideration or if the consideration is inadequate, the contract may be deemed unenforceable. For example, if a party promises to pay for something in exchange for a service, but fails to pay, the contract may not be enforceable due to the lack of consideration.
An unconscionable contract is one that is grossly unfair or oppressive to one party. It may be deemed unenforceable if it is found to be unconscionable at the time of the agreement. Factors that may indicate unconscionability include unequal bargaining power, lack of alternative options, and hidden terms.
In conclusion, an unenforceable agreement is a contract that is not legally binding. There are various reasons why a contract may be deemed unenforceable, including violation of public policy, lack of consideration, and unconscionability. Parties should be aware of the legal requirements for a valid and enforceable contract to avoid entering into an unenforceable agreement.