What defines a voidable contract?

A voidable contract is defined as an agreement that one or more parties to the contract can legally cancel or void. This means that while the contract is valid and enforceable at the outset, certain circumstances allow one party the option to withdraw from the agreement without penalty. Common reasons for a contract to be voidable include situations involving misrepresentation, undue influence, coercion, or where one of the parties lacks the legal capacity to form a contract, such as being a minor or mentally incompetent.

In contrast, a void contract is one that is not valid from the inception due to various reasons, such as illegality or lack of essential elements, which is why the first option stating it is always invalid does not apply. The other options do describe agreements, but they do not capture the essence of what makes a contract voidable as accurately as the definition that highlights the potential for cancellation by one or more parties involved.