An unenforceable contract or clause is one that, while it may have been validly entered into and represents a genuine agreement between the parties, cannot be upheld or enforced by a court due to certain legal deficiencies.
Reasons for a contract being unenforceable include the absence of a written document when one is required by law, the expiration of statutes of limitations, or terms that are against public policy.
The concept of unenforceability recognizes that while an agreement may exist and have been intended to have legal consequences, specific legal principles or requirements prevent the courts from enforcing it.
This does not necessarily render the contract void or voidable but places it in a state where the legal system cannot be used to enforce compliance. Parties might still voluntarily perform according to the contract's terms, but legal remedies for breach may be limited or unavailable.
Contract Law: Various aspects, such as the necessity of writing under the Statute of Frauds, can render contracts unenforceable if not complied with.
Employment Law: Certain employment agreements or clauses might be found unenforceable if they violate labor laws or public policy, such as overly restrictive non-compete clauses.
One common misconception is that unenforceable and illegal are synonymous, suggesting that an unenforceable contract is unlawful. In reality, unenforceability relates to the ability to enforce the contract in court, not its legality.Another misunderstanding is that all terms of an unenforceable contract are invalid; often, specific clauses may be unenforceable while the rest of the contract remains in effect.
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Wayne State University School of Law
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