Humber/Ontario Real Estate Course 1 Exam Practice

What is true about a void contract?

1. It is enforceable, valid and binding until one of the parties decides to cancel that agreement

2. It is actually not a contract at all

3. It can be enforced by the Court

4. It is valid, but capable of being cancelled if both parties agree to do so

The correct answer is: It is actually not a contract at all

A void contract is indeed one that is not recognized as a valid contract under the law. This means that it lacks the necessary elements to constitute an enforceable agreement, such as offer, acceptance, and consideration. Because it is considered a legal nullity, it cannot be enforced by either party or by the court. This characteristic sets it apart from valid contracts, which can be legally binding and enforceable. The other options present scenarios that do not apply to a void contract. For instance, the idea that it could be enforceable until a party cancels implies that there is a temporary validity to the agreement, which contradicts the definition of a void contract. Similarly, suggesting that it can be enforced by the court overlooks its inherent lack of legality. Lastly, a void contract cannot simply be cancelled by mutual agreement since it was never legally valid to begin with. Therefore, the view that a void contract is not a contract at all is the accurate understanding of its nature.