Leasing License Practice Exam

Why might an unenforceable contract not hold up in court?

1. It is missing one party's signature

2. The purpose is illegal

3. It was not witnessed

4. It has not been notarized

The correct answer is: The purpose is illegal

An unenforceable contract is typically not held up in court because one of its fundamental elements is invalid, which often pertains to the legality of the contract's purpose. If a contract involves activities that violate the law or public policy, it cannot be enforced. This means that even if both parties agreed to the terms and signed the contract, if the contract calls for illegal actions, such as drug trafficking or other unlawful activities, the court will not support its enforcement. The legal system will not provide a remedy for a contract that is based on illegal objectives, emphasizing the principle that no one should benefit from illegal actions. The other options present situations that may affect enforceability but do not carry the same absolute disqualification. A missing signature from one party may render an agreement incomplete and less likely to be enforceable, but it does not inherently mean the contract is unenforceable in the same way that an illegal purpose does. Similarly, lack of witnesses or notarization may affect the perception of validity or create issues in proving the contract but does not fundamentally impact the legality of the contract's content. Therefore, illegal purpose stands out as the primary reason that would prevent a contract from being upheld in a court of law.