If you are entering into a contract in Florida, it is important to know whether the contract is actually enforceable or not. A null and void contract is an agreement that is not legally enforceable. Although a contract was actually created between the parties, if it is null and void, it cannot be enforced by a court.
What makes a contract void?
A contract can be null and void without revocation of the initial offer for several reasons. To begin, the initial offer is only revocable by the offeror if the offer was not accepted by the offeree. This is because one of the essential elements of a contract was not present—acceptance. There are four essential elements of a contract: (1) offer, (2) acceptance, (3) consideration and (4) certainty of terms. If a contract is missing one of these elements, then it is void.
The first element is “offer.” An offer should be so clear and unambiguous as to give the other party the power to simply say “yes” to accept the offer. For example, if Greg asks Larry “will you wash my car Saturday at noon for $20.00?” all Larry has to say is “yes” to accept since he knows exactly what he needs to do fulfill the promise in exchange for the money.
The second element is “acceptance”. A contract can be accepted in one or two ways, depending on the type of contract that is formed.
(1) If the contract is bilateral, meaning that it requires a promise in exchange for a promise, then either conduct or words will signal acceptance, and notice of acceptance is required. For example, a bilateral contract would be the washing car promise. There, Greg is promising to give Larry $20.00 if Larry promises to wash Greg’s car. Larry would signal his acceptance by saying yes and this would also give Greg notice of acceptance.
(2) If the contract is unilateral, meaning that it only requires performance in exchange for the promise, then only conduct signals acceptance, and notice of acceptance is not required. For example, the best example of a unilateral contract is a Lost Dog poster because you do not need to tell the owner of the lost dog that you are searching for the dog, you simply commence searching and if you find it, you return it and then you would receive the reward.
The third element is consideration. In order to meet the requirement for consideration, there needs to be a (1) detriment and (2) a bargain for exchange. Detriment is usually a surrender of a legal right, or an inhibition of a right. The “bargain” in bargain for exchange is what is sought by the promisor in exchange for the promise. The “exchange” is what is given by the promisee in exchange for the promise. For example, in the Larry and Greg car wash example, Larry’s detriment would be that he is giving up his legal right NOT to wash Greg’s car if he enters into the contract, while Greg’s detriment is that he is giving up $20.00.
The fourth element is certainty of terms. Under Restatement Second of contracts §33, the terms of the contract have to be sufficiently certain so that they can (1) provide a basis for determining the existence of a breach and (2) provide a basis for giving an appropriate remedy if there is a breach. Without certainty of terms, then the promisee’s expectation interest in the outcome of the contract is not protected. For example, in the Greg and Larry scenario, the terms are certain enough to determine when there would be breach and the appropriate remedy: if Greg does not pay the $20.00 once Larry washes his car then Greg breaches, the remedy being to pay Larry the $20.00; or if Larry does not wash Greg’s car at the specified date and time once he agrees to the promise, then Larry breaches, the remedy being to compensate Larry for the car wash.
Although a contract will be initially void because it is missing one of these elements when it is formed, a contract can also become voidable in a few different scenarios. Void and voidable are not to be mistaken as the same—a void contract means it was not enforceable from its formation, while on the other hand, a voidable contract is one that becomes unenforceable due to an event.
What makes a contract voidable?
Generally, a contract can become voidable if: (1) a party was threatened or forced into a contract or (2) one of the party breaches the contract.
If a person was pressured into an agreement, the contract may become voidable if the court finds that the person who was threatened would not have entered into the contract if they had not been pressured to do so. For example, if your psychologist threatens to tell you confidential information to a third party if you do not pay a higher rate for their services. That threat of a serious breach of privacy is the only reason you are pressured into paying a higher rate and that contract could become voidable.
A breach can also may a contract voidable, depending on the type of breach that occurs. There are three types of breaches: (1) immaterial, (2) material, and (3) total. An immaterial breach will not make the contract voidable, it basically leaves the duties unaffected. A material breach will temporarily void the contract by suspending the non-breaching party’s duties until the breach is corrected. Finally, a material breach will void the contract, as it cancels the contract altogether because there is either not enough time to fix the breach or not worth the resources.