Which contract status describes a contract that involves illegal activities and is not enforceable?

Which contract status describes a contract that involves illegal activities and is not enforceable?

• A. Void
• B. Voidable
• C. Unenforceable
• D. Valid

Answer: (A)

When a contract has an illegal purpose, it has no legal effect from the start. That’s why it’s void: the law refuses to create or enforce an agreement tied to illegal activities, so there’s no binding obligation and no remedy available. A voidable contract, by contrast, remains valid at first but can be rescinded for other defects like fraud or duress; illicit purpose doesn’t give a party the right to cancel. An unenforceable contract is one that could be valid but can’t be enforced for a technical reason (like lacking the required writing), not because its purpose is illegal. A valid contract is simply one that’s legal and enforceable.

When a contract has an illegal purpose, it has no legal effect from the start. That’s why it’s void: the law refuses to create or enforce an agreement tied to illegal activities, so there’s no binding obligation and no remedy available. A voidable contract, by contrast, remains valid at first but can be rescinded for other defects like fraud or duress; illicit purpose doesn’t give a party the right to cancel. An unenforceable contract is one that could be valid but can’t be enforced for a technical reason (like lacking the required writing), not because its purpose is illegal. A valid contract is simply one that’s legal and enforceable.