Voidable Contract
Synonyms: avoidable contract، defective contract، contract subject to rescission، contract affected by will defect، ratifiable contract
Last updated: 2026-05-09
Short Definition
Originally valid contract that can be invalidated upon request by one party for some defect, like incapacity, duress, or fraud.
Overview
Legal Basis
The provisions of voidable contracts are based on the texts governing defects in will (mistake, fraud, duress, and unconscionability) in the Saudi Civil Transactions Law, and on Islamic jurisprudence principles regarding options and ratification.
Practical Example
Noura Al-Shahri signed a tenancy agreement for an apartment in Al-Malqa district, Riyadh, at 38,000 SAR annually after the broker assured her that the unit was 120 sqm and overlooked a garden. Upon taking possession, she found that the actual area was only 85 sqm and the unit overlooked a back street. She consulted a lawyer who advised her that the contract was voidable due to a fundamental mistake and fraud by the broker. Noura filed a voidance request through REGA within three months of discovering the defect. She was offered mediation with three options: avoid the contract and recover all her payments, retain it with a reduced rent of 27,000 SAR reflecting the actual area, or claim compensation. She chose the second option.
Common Mistakes
- ✗Delaying the avoidance claim until the statutory period expires, which causes this right to lapse
- ✗Continuing to perform the contract after discovering the will defect, which may be interpreted as implied ratification
- ✗Confusing the right of avoidance with the right of rescission; rescission requires a failure of performance while avoidance traces back to a defect in formation
- ✗Believing that the aggrieved party's ratification of the contract eliminates their right to compensation, which is incorrect
- ✗Filing an avoidance claim without attempting mediation permitted by REGA, which prolongs the dispute
International Differences
In the UAE, civil transaction laws regulate the avoidance system and defects in consent, with RERA oversight of disputes arising on this basis. In Turkey, the Turkish Code of Obligations distinguishes between İptal Edilebilirlik (avoidance) and Kesin Hükümsüzlük (absolute nullity) with detailed provisions for each case. In Egypt, civil law expands the concept of gross unconscionability to cover cases of exploitation. In the UK, avoidance is regulated under the Misrepresentation Act and the doctrine of Undue Influence. In the US, most states permit avoidance of contracts based on Fraud, Duress, or Unconscionability.