Where this fits on the exam
| Official syllabus topic | Contracts: Validity and Enforceability |
|---|---|
| Official PSI area | Contracts |
| Published weight | 19% of the national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual comparison. Use the source, document, actor, event, and timing stated in the question before applying a memorized definition.
Side-by-side comparison
Read across each row. The terms are deliberately compared on identical dimensions so the difference remains clear when the exam hides the vocabulary inside a scenario.
| Decision dimension | Void | Voidable | Unenforceable |
|---|---|---|---|
| Legal status | No legal effect from the beginning | Valid unless the protected party rescinds or avoids it | May be valid but a court remedy is unavailable because of a defense |
| Who can act | No party can make the invalid bargain enforceable merely by preference | Party protected by the defect generally chooses | Party raising the enforcement defense |
| Example | Agreement for an illegal purpose | Contract induced by qualifying fraud or signed by a protected minor | Oral agreement within an applicable statute of frauds |
| Exam question | Did a legal contract exist? | Who may disaffirm? | Will a court enforce it? |
Decision rule
Georgia-specific distinction
Worked example
Scenario. A competent adult induces the other party to sign through qualifying fraud, and the defrauded party has not yet rescinded.
Reason it through. Fraud can give the protected party the option to avoid a contract; it does not necessarily mean no contract ever existed.
Answer. The contract is voidable by the defrauded party.
Common exam traps
- Using void and voidable interchangeably
- Assuming only unsigned contracts are unenforceable
- Letting the wrong party disaffirm
- Treating a bad deal as legal invalidity
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1A buyer knowingly signs a purchase agreement after relying on the seller's fraudulent statements about the property. The buyer has not yet chosen to rescind. What is the contract's status?
- A. Void from the start for both parties
- B. Voidable by the defrauded party
- C. Unenforceable by either party
- D. Valid and binding on both parties
Show answer and explanation →
Answer: B. Voidable by the defrauded party
The buyer knowingly agreed to the purchase but was induced by qualifying fraud. That gives the defrauded buyer the choice to seek avoidance, making the contract voidable rather than automatically void. This is different from being deceived about the nature of the document itself, where assent can present a different legal issue.
- A. Incorrect. Ordinary fraud inducing assent makes the agreement avoidable by the protected party, rather than automatically void from inception.
- B. Correct. The defrauded party may choose to avoid the contract. Until proper avoidance, its status is voidable.
- C. Incorrect. The defect gives the defrauded party a choice of remedies. It does not mean both parties have the same blanket defense to enforcement.
- D. Incorrect. The contract has legal effect until avoided, but this answer omits the defrauded party's right to avoid it. Voidable is the more precise status.
Question 2Two parties sign a lease of a building to be used for an illegal gambling operation. What is the lease's status?
- A. Voidable by the landlord
- B. Valid but unenforceable
- C. Void
- D. Valid until a court rules
Show answer and explanation →
Answer: C. Void
An agreement for an illegal purpose is void and has no legal effect from the start. Neither party can make it enforceable by choosing to go forward. Voidable is the wrong choice, but that status requires a protected party with a choice, and illegality protects no one.
- A. Incorrect. The joint illegal purpose makes the agreement void, rather than giving only the landlord a personal option to avoid it.
- B. Incorrect. The unlawful purpose prevents a valid bargain. This differs from a lawful agreement blocked by a procedural writing defense.
- C. Correct. An agreement made for the stated illegal operation is void for illegality. Choosing to continue does not cure that purpose.
- D. Incorrect. A court may resolve a dispute, but the illegal purpose does not become valid merely because no court has ruled yet.
Question 3A seller and buyer orally agree on the sale of a lot, and neither has performed. Georgia's statute of frauds requires contracts for the sale of land to be in writing. How is the agreement best classified?
- A. Void
- B. Voidable by the buyer
- C. Valid and enforceable
- D. Unenforceable
Show answer and explanation →
Answer: D. Unenforceable
An oral agreement covered by the statute of frauds may otherwise be valid, but the writing requirement gives a defense that blocks court enforcement. That makes it unenforceable. Void is wrong because nothing about the agreement is illegal, and the problem is a missing writing.
- A. Incorrect. The problem is the required writing, not an inherently illegal bargain. The usual classification is unenforceable.
- B. Incorrect. Voidability gives a protected party an election based on a qualifying defect. The stated issue is the statute-of-frauds writing defense.
- C. Incorrect. The stem removes performance and supplies a writing requirement. A purely oral land-sale agreement does not satisfy it on these facts.
- D. Correct. The writing requirement bars enforcement of this oral land-sale agreement on the stated facts. That is unenforceability rather than automatic voidness.
Ready to move on?
You have this distinction down when all of these are true.
- Define every compared term without using the other term as the definition.
- Rebuild the comparison table from memory.
- State the decision rule and Georgia distinction without notes.
- Solve the worked example after changing one key fact.
- Explain the rule or fact that makes each distractor wrong.
- Answer all three original questions correctly in mixed practice on a later day.
Recommended next lesson
Continue with Executed Versus Executory Contract. Next, executed versus executory contract adds a second way to classify a contract, by how much has been performed, as with a signed purchase agreement still waiting on closing.
Return to the complete exam-concept library or the Contracts hub.