5 things that can invalidate your business contract

On Behalf of | Mar 11, 2024 | Business Law

Are your business contracts valid?

You don’t want to sign a contract that won’t protect you and any party you work with. Despite taking the time to draft a solid contract, some factors can invalidate it if you’re not careful when drafting.

Illegal subject matter

The products or services your business offers must comply with federal and state laws. You should also ensure those you pay for are legal. If your contract outlines an illegal subject matter, it may be invalid.


Every term in your contract should be clear. When a term can be reasonably susceptible to more than one meaning/interpretation, your contract may be ambiguous. While the court can do its best to resolve this matter, it can also potentially declare your agreement invalid.


If a party is pressured into signing a contract, it can be invalidated. Each party should enter into a contract voluntarily. Always give the parties you wish to work with a fair and reasonable time to go through a contract before signing. They should not feel pressured to sign the contract.


You need to be extra careful when working with minors, as this can void a contract. You should also confirm everyone you enter into a contract with has required mental capacity. For example, someone can’t lawfully sign an agreement while under the influence of alcohol or other drugs. Thus, serving wine or champagne when closing deals with prospective parties may be unwise. Lack of capacity to enter into a contract can be reason enough to invalidate a contract.


A contract whose terms/outcomes are unfair (substantive unconscionability) can be deemed invalid. This may also be the case if a contract was unfairly made, perhaps one party had significantly more bargaining power/intelligence (procedural unconscionability).

Drafting a valid agreement is critical. Learn more about contracts, and seek legal guidance as necessary, to more effectively avoid mistakes that can disadvantage your business down the road.


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