In what situation is a contract considered voidable?

A contract is considered voidable when one party lacks the legal capacity to enter into a contract. This lack of capacity can arise for various reasons, such as being a minor, having a mental impairment, or intoxication at the time the contract is made. When a party lacks capacity, they have the option to affirm or void the contract, meaning they can choose to either enforce it or nullify it. This legal protection is in place to prevent the exploitation of individuals who may not fully understand the implications of their agreements due to their incapacity.

In contrast, situations like duress, while they can also lead to a contract being voidable, are more focused on coercion rather than capacity. Verbal agreements can be valid; their enforceability depends on the context and specific contract terms rather than grounds for being voidable. Finally, the act of both parties signing a contract indicates mutual consent and does not inherently make a contract voidable. Thus, the correct interpretation hinges on the specific issue of capacity in contractual agreements.