What do we call an agreement that cannot be enforced legally?

An agreement that cannot be enforced legally is referred to as a void contract. A void contract is one that is not legally valid and has no legal effect from the moment it is created. This could be due to the lack of essential elements required to form a valid contract, such as an offer, acceptance, consideration, capacity to contract, or lawful object.

For instance, if an agreement is made to perform an illegal act, such as selling prohibited substances, that agreement is void because it goes against the legal principles and cannot be enforced in a court of law. As a result, no party can seek legal recourse for breach of a void contract since it is treated as if it never existed.

In contrast, a voidable agreement refers to a valid contract that one party may choose to affirm or reject, such as those made under duress or misrepresentation. An illegal contract is intrinsically void, similar to a void contract, because it involves unlawful activities. An unconscionable contract, while it may be enforceable, contains terms that are grossly unfair or oppressive, leading to potential legal challenges.

Understanding these differences is crucial for recognizing the implications and enforceability of various forms of agreements in business law.