Which contract is valid but can be canceled by one or both parties due to misrepresentation, coercion, lack of capacity, etc.?

• A. Void contract
• B. Executory contract
• C. Voidable contract
• D. Assignment

Answer: (C)

A contract that is valid and enforceable but can be canceled by one or both parties because of issues at formation—such as misrepresentation, coercion, or lack of capacity—is a voidable contract. The defect exists, giving the affected party the option to disaffirm and rescind, while the contract remains binding until that option is exercised. If the party chooses to cancel, the contract is treated as if it never existed for them, and any necessary restitution may follow. By contrast, a void contract never has legal effect from the outset, so it cannot be enforced or ratified; an executory contract is simply one not fully performed yet; and an assignment deals with transferring rights or duties to another party, not with the contract’s validity.