An unenforceable contract is a legal agreement that meets the standards of validity but, for some reason, the court determines that the contract should not be enforced. There are a number of reasons that a contract may be found to be unenforceable most of which hinge on whether the signatories were lied to or not compensated for entering into the agreement.

There are many reasons that a contract or section of a contract may be found to be unenforceable. Typically they all depend on violations of the basic contract principles of consent and consideration. From coercion, to unconscionable terms, if a signatory was deceived, in an altered state, or improperly compensated the contract will generally be held to be unenforceable.

An unenforceable contract is one in which the court rules that the agreement is not able to be enforced while still being legally valid. On the other hand, a void contract is one that is not held to be legally valid to begin with.

If a contract is deemed to be unenforceable, the consequences of that are dependent on the nature of the contract. If a contract is for a loan or property, then an unenforceable contract may result in the borrowing party to be released from their obligation to pay or the lending party being able to repossess the owed amounts in full immediately.

The best way to prevent entry into an unenforceable contract is to have any legally binding agreement reviewed by an experienced contract law attorney. A contract law attorney can analyze an agreement and identify holes and deficiencies in the contract before you enter into the agreement.