What is an unenforceable contract?

An unenforceable contract refers to a valid agreement that cannot be enforced in a court of law due to certain defenses or external factors that limit its enforceability. For instance, an agreement may meet all the essential elements of a contract—such as offer, acceptance, and mutual consent—but could still be rendered unenforceable due to circumstances like the statute of limitations or the presence of certain defenses, such as fraud or duress.

This occurs when, although a party has a legitimate reason to claim that the agreement is binding, legal hurdles prevent them from obtaining a remedy if the other party does not fulfill their obligations. Hence, a contract may be legally sounded yet remain unenforceable in practice, making this understanding crucial for determining the legal viability of agreements in business and law contexts.

In contrast, an invalid contract is one that cannot be enforced from the beginning; a mutual voiding of a contract by both parties signifies a different legal status; and contracts that lack consideration typically do not qualify as enforceable agreements at all.