*  Any contract that you and the other party agree to cancel.

*  Many contracts made by minors. This is why, if you must deal with a minor, only the legal guardian should be allowed to sign any contracts.

*  A contract that must be in writing, according to the law, but is not. As you remember that includes thepurchase or sale of any real property.

*  Contracts that involve "fraud" or "misrepresentation." Fraud is a false statement that is made on purpose. Misrepresentation may involve a mistake. 

*  A contract based on a significant false statement made by the other person. If a seller tells you the house has no termite problems and just before the close you find it has serious termite damage, you can void the contract... or negotiate an adjustment in the terms of the contract.

*  If the contract contains an innocent mistake, you can get out of the agreement if the mistake is important.

*  Contracts involving "undue influence." Suppose a nephew takes care of you during a long illness and you become
dependent on his help. If he convinces you at that time to sell your house to him at a very low price, you may be able to get out of the agreement. 

*  Contracts made against your will. Perhaps someone threatens you if you do not agree to sell at their price. If you can prove "duress," then you may be able to get out of the agreement.

*  Contracts that involve doing something illegal.

You should know that even though you may be able to cancel these contracts legally...you might have to sue or you might be sued if the other party does not want to release you from the contract. A judge would then decide if the contract can be cancelled. Most lawsuits involving contracts are the result of someone's failure to keep a promise.

Or, the lawsuit could involve money that you promise to pay if you fail to live up to a contract. The lawsuit does not have to involve money. For example, someone can sue you to keep you from breaking a contract.

Suppose the other person wants the item that was contracted for instead of money. If real estate or certain unique items such as heirlooms or works of art are involved, the other party can sue to try to make you stick to the agreement. That's called suing for Specific Performance.

A contract is only as good as those who are signing it. If you find out the other party in your deal is a lying, cheating flake... why invite trouble? Walk away before signing.

* This series was written by an investor and not an attorney. Nothing here should be considered legal advice. If you have a question about any contract ask an attorney BEFORE SIGNING!

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