Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following statements best describes a void contract?

1. A contract that has legal effect but cannot be enforced

2. A contract that is valid but can be annulled by one party

3. A contract that has no legal effect and is unenforceable

4. A contract that was once valid but is no longer binding due to alterations

5. A contract that is valid and fully enforceable

6. A contract that requires one party to deliver a benefit to the other

The correct answer is: A contract that has no legal effect and is unenforceable

The statement that best describes a void contract is that it is a contract that has no legal effect and is unenforceable. A void contract is essentially treated as if it never existed in the eyes of the law. This means that it lacks the necessary elements to be considered valid from the outset, such as mutual consent, lawful purpose, or capacity of the parties involved. Because it is deemed invalid, neither party can enforce the contract against the other, and it carries no legal obligations. In contrast, other statements describe situations involving contracts that may have some legal ramifications. For instance, a valid contract that can be annulled by one party indicates a different type of legally recognized agreement, as does a contract that was once valid but is no longer binding due to alterations. These concepts indicate varying degrees of enforceability or potential for enforcement that do not apply to a void contract.