California Real Estate Practice Exam

In contracting, if one of the parties enters the agreement under duress, the contract would be:

1. Illegal

2. Valid

3. Void

4. Voidable

The correct answer is: Illegal

In the context of contracting, duress refers to a situation where one party is forced into an agreement through threats, coercion, or undue pressure. When a party enters into a contract under such circumstances, the legal standing of that contract is significantly impacted. A contract entered into under duress is not illegal in a criminal sense, but it is considered voidable. This means that the party who was coerced has the right to affirm or reject the contract. This principle ensures that contracts are based on the voluntary consent of all parties involved, which is a fundamental requirement for enforceability. So, the best understanding of the situation is that a contract formed under duress can be voided at the discretion of the coerced party, thus rendering the agreement effective until that party decides to nullify it. This allows individuals to avoid being bound by agreements they entered into without genuine consent, ensuring fairness in contractual relationships.