The Requirement that You Voluntarily Enter into a Contract

When Can You Argue that You Didn’t Agree of Your Own Free Will and Knowledge

Under long-established law, one of the requirements for a contract to be valid and enforceable is that all parties must have voluntarily entered into the agreement. What does that mean? What might cause a contract to be void or unenforceable because of lack of volition?

What Does It Mean to Enter a Contract Voluntarily?

The fundamental requirements for voluntarily entering into an agreement are:

• That you understood that it was a binding agreement to which you were committing yourself
• That you fully understood the terms of the agreement, including both your rights and your obligations
• That you knowingly and intentionally agreed to be bound by those terms

What Circumstances May Indicate that an Agreement or Contract Was Not Voluntary?

A number of factors can provide evidence that both parties did not voluntarily agree to a specific contract:

• Mistake—This may be a mistake of fact or a mistake of law. Furthermore, it may be a mutual mistake or a unilateral mistake. A mutual mistake typically allows either party to void the contract. A unilateral mistake may also lead to the invalidity of the agreement, but typically only when the person who wasn’t mistaken had an unfair bargaining position.
• Misrepresentation or fraud—If one intentionally makes a misstatement of material fact, and the other party reasonably relies on that misstatement, a court may void the contract for lack of volition, provided it can be shown that the parties would not have entered into the agreement if there had been no misrepresentation
• Undue influence or duress—This situation typically involves threats of force, the use of psychological pressure, false imprisonment or coercion to compel or persuade a person to enter into a contract

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At MCIS Law, PLLC, in Stafford, we provide comprehensive counsel to businesses in southeast Texas. For a confidential consultation with an experienced and knowledgeable lawyer, email us or call our office at (346) 297-0121. We accept all major credit cards.