Which situation typically leads to the enforcement of a voidable contract?

Study for the CA Foundation Business Law Exam. Practice with multiple-choice questions, review detailed explanations, and ace your exam!

The enforcement of a voidable contract typically arises when one party that has the right to void the contract chooses instead to enforce it. A voidable contract is one where the validity can be affirmed or rejected by one party, usually due to the presence of certain defects such as misrepresentation, undue influence, or coercion. When the party with the option decides to enforce the contract, they are effectively waiving their right to void it. This decision transforms the contract from a potentially voidable state into an enforceable agreement.

In contrast, the other situations mentioned do not directly lead to the enforcement of a voidable contract in the same manner. The agreement to litigation by both parties does not inherently validate a voidable contract; it merely signifies a willingness to resolve disputes in court. Ratification by a third party does not apply to voidable contracts, which hinge on the choice of the party with the option. Lastly, revising the contract and obtaining consent from all parties may create a new agreement altogether rather than enforcing the original voidable contract. Thus, the correct answer points to the fundamental principle that the enforcement hinges on the decision of the party entitled to act upon the voidable nature of the contract.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy