A contract is a legally binding agreement, and once both parties have reached an agreement and signed the contract, both parties should fulfill what was agreed in the contract. However, in some cases, the contract can be revoked or rescinded. Here are five common situations in which a contract can be voided:
Fraud:When one party concludes a contract by misleading the other party through deception, concealment or misrepresentation, the other party has the right to rescind the contract.
Coercion:When one party forces the other party to sign a contract by means of threats, intimidation or pressure, then the other party has the right to rescind the contract.
Error:When a party reaches an agreement due to its own negligence or misunderstanding of the facts at the time of signing the contract, then that party has the right to rescind the contract.
Illegal:Both parties have the right to withdraw from the contract if the content of the contract or the manner in which it was concluded violates laws and regulations.
Not authorized to represent:When one party does not have the right to sign a contract on behalf of another person, or if the content of the contract signed on behalf of another person does not conform to the wishes of the other person, then the parties to the contract have the right to rescind the contract.
It is important to note that the rescission of a contract should be based on some valid reason and need to be carried out within the statutory time limit. If the rescission request complies with the law, the contract will be considered null and void and both parties will revert to the state they were in before the agreement.