CA Foundation Business Law Practice Exam 2025 – All-In-One Guide to Master Your Exams!

When discussing voidable contracts, it's essential to understand their nature. A voidable contract is one that is valid and enforceable on the surface but may be legally voided at the option of one of the parties involved due to certain circumstances, such as misrepresentation or undue influence. If a voidable contract is not performed on time, it remains in a state where the party entitled to avoid the contract still has that option.

The non-performance does not change its status as voidable; the aggrieved party can choose to affirm the contract or to void it based on the breach of terms or conditions specified. This means that the party still has the ability to either enforce the contract or decide to be released from it due to the circumstances of non-performance.

It's important to note that other alternatives do not accurately reflect the behavior of a voidable contract. For example, a voidable contract does not become automatically enforceable just due to non-performance nor does it require immediate renegotiation. Additionally, it does not simply remain valid regardless of performance; its enforceability hinges on the choice of the party who has the right to void it.

Thus, the correct understanding is that the voidable contract remains voidable, giving the party the option