Valid, Void, Voidable, Executed and Executory Contracts

These classifications do not sit on one scale. Valid, void, voidable and unenforceable describe formation or enforceability. Executed and executory describe the state of performance. One agreement can therefore be both valid and executory.

The answer in one table

The most common exam mistake is calling an executory contract invalid. Outstanding performance does not mean defective formation.

Official source map

The New York Department of State 77-hour curriculum requires competent parties, mutual agreement, lawful objective, consideration and the applicable writing. Its key terms expressly include executed contract, executory contract, void and voidable.

Current New York authorities add the legal detail:

• New York appellate decisions: offer, acceptance, consideration, mutual assent and intent to be bound establish an enforceable agreement.
• General Obligations Law section 3-101: a person who has reached age 18 cannot disaffirm a current contract merely on the ground of infancy.
• General Obligations Law section 5-703: specified real-property agreements require a signed writing.
• New York contract decisions: voidable agreements remain operative unless avoided and can sometimes be ratified.
• Judiciary Law section 478 and Department of State guidance: a salesperson must stay within the licensed role and avoid practicing law.

This article teaches classification. The next articles cover formation elements and New York's Statute of Frauds in greater depth.

First question: was an agreement formed?

New York courts look for objective manifestations of agreement. A person cannot create a contract merely by privately intending to agree.

The central formation elements are:

1. Offer: a sufficiently definite proposal.
2. Acceptance: assent to the offer as made.
3. Consideration: a bargained-for legal benefit, detriment, promise or forbearance.
4. Mutual assent: objective agreement on essential terms.
5. Intent to be bound: words and conduct show commitment rather than preliminary discussion.
6. Competent parties and lawful objective: the parties have legal capacity and the promised objective is lawful.
7. Required form: when a statute requires a writing, the agreement satisfies that rule or an applicable exception.

In Hogan v Bullock, a New York appellate court restated offer, acceptance, consideration, mutual assent and intent to be bound as the requirements for a valid existing contract. The court also showed that a disagreement about interpreting an agreed term does not necessarily mean no contract was formed.

Formation versus interpretation

Suppose both parties signed a contract to sell 10 Oak Street but later disagree about whether an “access” clause creates an easement or a license.

That dispute may concern interpretation. It does not automatically erase assent to the transaction.

By contrast, if one document identifies 10 Oak Street and the other party purportedly accepts a deal for 12 Oak Street, there may be no agreement on the property itself.

Valid contract

A valid contract is one that satisfies the applicable formation and enforceability requirements.

For exam purposes, look for:

• parties with capacity
• a definite offer and matching acceptance
• objective mutual assent
• consideration
• a lawful purpose
• any writing or signature required by law

Valid does not mean dispute-free

A valid contract may later be:

• breached
• modified
• assigned when permitted
• terminated under a clause
• discharged by performance
• rescinded by agreement or legal remedy
• enforced through damages or specific performance when available

Breach presupposes a contract or duty. A seller's failure to close does not by itself make the sales contract void. It may make the seller the breaching party under a valid agreement.

Valid does not mean every clause will survive

A court can sometimes refuse to enforce a particular provision without destroying the entire agreement. A severability clause may express the parties' intent, but the result depends on the law and the importance of the invalid term.

Resist the urge to assume “one bad clause means no contract.”

Void contract

A void contract is ineffective from the beginning. It binds no one and does not need a protected party to disaffirm it.

The word is often used where:

• no agreement was formed because assent to essential terms was absent
• the claimed objective is illegal or violates controlling public policy
• a statute expressly declares the arrangement void
• the supposed actor lacked any legal authority and no recognized doctrine supplies assent

The exact result depends on the rule involved. Courts sometimes use “void,” “invalid” and “unenforceable” with care, and sometimes less precisely. On the exam, classify from the stated facts and the remedy.

No contract versus void contract

Strictly speaking, a failed offer and acceptance means no contract was formed. Exam materials may group that result with void agreements because neither creates an enforceable contract.

The clearest explanation is:

• no mutual assent: no contract came into existence
• void by law: a purported agreement has no legal effect

Both differ from voidable, because no protected party must elect avoidance before the agreement stops operating.

Illegal purpose

An agreement for a lawful property sale is not made valid by adding an illegal side promise. A contract that requires unlawful conduct can be void or unenforceable as public policy requires.

A salesperson should not decide a difficult illegality question for a client. Flag the issue for the supervising broker and attorneys.

Voidable contract

A voidable contract is not automatically a nullity. It remains operative until the party holding the power of avoidance takes legally effective action.

Common grounds can include:

• actionable fraud or material misrepresentation
• duress through a wrongful threat that overcomes free will
• undue influence
• qualifying mental incapacity
• infancy, subject to statutes and exceptions
• unconscionability in appropriate circumstances

The person protected by the rule generally chooses whether to avoid or affirm the agreement. The other party cannot use that protection simply because the bargain later became unattractive.

Ratification

Ratification means affirming an agreement that could have been avoided. It can occur expressly or through conduct that is inconsistent with disaffirmance after the disabling condition ends and the relevant facts are known.

In Wu v Uber Technologies, the court explained the core distinction: a void agreement is ineffective from the outset, while a voidable agreement continues unless avoided and may be ratified.

Delay can matter. A party claiming duress or another voidable ground should obtain counsel promptly rather than continuing to accept benefits while reserving a private objection.

Capacity and age

Capacity is not the same as intelligence, bargaining skill or business experience.

New York General Obligations Law section 3-101 states that a person who has attained age 18 may not disaffirm a current contract on the ground of infancy. A person under 18 can have a power to disaffirm many agreements, subject to statutory and common-law exceptions.

The exam distinction is:

• a minor's agreement is generally voidable, not automatically void
• the avoidance power belongs to the protected minor, not the adult counterparty
• necessities and specific statutes can change the outcome

Do not add facts. If a question simply states that a buyer is 17, look for the voidable classification, while recognizing that an actual transaction requires legal analysis of exceptions and court approval rules.

Mental incapacity

Mental incapacity can make an agreement voidable when the legal standard is met. A later diagnosis or an unusual decision does not by itself prove incapacity at formation.

The issue is fact-sensitive and may involve whether the person understood the nature and consequences of the transaction and whether the other party knew or should have known of the condition. An adjudication and guardianship order can alter authority more directly.

A licensee who observes a genuine capacity concern should pause and involve the supervising broker and counsel. The licensee should not perform a medical or legal diagnosis.

Fraud, misrepresentation and duress

Fraud in the inducement

Fraud in the inducement means a party understood that an agreement was being made but was deceived about a material fact that caused the agreement.

The typical remedy is avoidance or rescission by the deceived party, subject to proof and election of remedies. That points to voidable, not automatically void.

Fraud in the execution

Fraud in the execution attacks whether a person knew the nature of the instrument being signed. When proven, it can mean no assent to the supposed agreement.

The exam may contrast:

• “I signed a sales contract because the seller lied about a material fact”: possible fraud in the inducement and voidability
• “I was tricked about the nature of the paper and did not know it was a sales contract”: possible formation failure

Duress

Pressure is not always legal duress. New York decisions require a wrongful threat that deprives the party of free will or leaves no reasonable alternative under the applicable standard.

Hard bargaining, financial stress or a threat to use a lawful remedy does not automatically establish duress.

When duress makes a contract voidable, the affected party must act to avoid it and must not ratify it after the pressure ends.

Unenforceable is not the same as void

An unenforceable contract may satisfy formation requirements, yet a court will not grant the requested enforcement because a legal defense applies.

Examples can include:

• a land contract that fails the applicable Statute of Frauds
• a claim filed after the governing limitation period
• an agreement made unenforceable by a licensing or public-policy statute
• a provision a court refuses to enforce as unconscionable

Statute of Frauds example

Buyer and seller orally agree on a parcel, price and closing date. Their communications do not satisfy General Obligations Law section 5-703, and no exception applies.

The precise answer is generally unenforceable, not “void from the beginning.” New York courts describe the Statute of Frauds as rendering a covered oral contract unenforceable.

This distinction matters because “no agreement existed” and “the court will not enforce this agreement in the requested way” are different conclusions.

Statute of limitations example

A limitation period concerns the timeliness of a legal claim. Its expiration does not rewrite history and declare that the parties never made an agreement.

Avoid using “void” as a catch-all for every failed lawsuit.

Executed contract

In the exam classification, an executed contract is fully performed by all parties.

For a real estate sale, that normally points to a completed closing:

• the seller delivered the deed
• the buyer delivered the purchase funds
• possession and closing documents were handled as required
• no material contractual performance remains

“Executed” can also mean signed

In legal drafting, people sometimes say a document was “executed” when it was signed. In contract-classification questions, however, executed usually means fully performed.

Use context:

• “The parties executed the contract yesterday”: likely signed
• “The contract is executed rather than executory”: fully performed

This language trap is common because both uses are accepted in professional conversation.

Closing does not erase every obligation

Some duties survive closing by contract or law. An indemnity, escrow obligation or representation may expressly survive. Other contract terms can merge into the deed.

For a basic classification question, completed closing points to executed. In practice, review survival and merger language before concluding that no obligation remains.

Executory contract

An executory contract has one or more material promises still to be performed.

A residential sales contract is usually executory after signing and before closing because the parties still must handle matters such as:

• down payment or escrow delivery
• title search and clearance
• financing contingency
• inspection or other contingency
• agreed repairs
• final walk-through
• payment of the balance
• deed delivery and acceptance

An installment land contract can remain executory for years while the buyer pays installments and the seller retains the deed until the contractual delivery point.

Partly performed is still executory

Buyer pays the contract deposit, and seller orders title documents. Performance has begun, but the deed and balance remain due.

The contract is partly performed and still executory.

A contingency does not necessarily prevent formation

A mortgage contingency usually creates a condition governing a party's performance or termination right. It does not automatically mean the parties formed no contract.

Read whether the clause is a condition to performance, a cancellation right or a condition to formation. The exact language controls.

One agreement can carry two labels

Use one label from each column:

Examples:

• A properly signed purchase contract awaiting closing is valid and executory.
• A contract induced by fraud and awaiting closing may be voidable and executory until the protected party acts.
• A fully completed lawful closing is ordinarily valid and executed.
• A failed oral land agreement may be unenforceable, even if one party began informal performance that does not satisfy an exception.

“Void and executed” is usually a warning sign because full performance does not transform a legal nullity into a valid contract, although completed conduct may create separate restitution or property issues.

Classification versus remedy

After classifying the agreement, ask what follows.

Rescission seeks to unwind an agreement. Termination ends future performance under a rule or clause. Cancellation can be used broadly in contracts. Discharge describes the end of contractual duties. Those words are related, but not interchangeable in every question.

Six worked exam scenarios

Scenario 1: signed and awaiting closing

Buyer and seller sign a lawful written sales contract. Title work and payment remain.

Best answer: Valid and executory.

Scenario 2: completed sale

The buyer pays the price, the seller delivers the deed and closing is complete.

Best answer: Executed in the performance-classification sense, subject to any duties that expressly survive closing.

Scenario 3: buyer is 17

A 17-year-old enters a purchase agreement, and no exception or approval fact is given.

Best answer: Generally voidable at the minor's option, not automatically void at the adult seller's option.

Scenario 4: seller changes their mind

A competent seller signs a valid contract, then receives a better offer and refuses to close.

Best answer: A possible breach of a valid executory contract. Regret does not make the agreement voidable.

Scenario 5: oral land agreement

The parties make an oral agreement to sell land, but the applicable writing rule is unsatisfied and no exception applies.

Best answer: Unenforceable under the Statute of Frauds, not automatically void for lack of formation.

Scenario 6: false material statement

A buyer signs because the seller intentionally made a material false statement on which the buyer justifiably relied.

Best answer: The facts may support fraud in the inducement and a voidable contract. Proof, remedy and ratification still matter.

Common misconceptions

“Executory means unsigned”

No. A signed agreement awaiting performance is the classic executory contract.

“Executed always means signed”

No. In classification questions, it generally means fully performed. Read the sentence context.

“A breach makes the contract void”

No. Breach ordinarily concerns nonperformance of a valid duty.

“A minor's contract is automatically void”

No. It is generally voidable by the minor, subject to exceptions.

“Fraud always means no contract existed”

No. Fraud in the inducement generally makes an agreement voidable. Fraud in the execution can attack assent itself.

“Unenforceable and void mean the same thing”

No. A void agreement has no legal effect from inception. An unenforceable agreement may exist even though a court will not provide the requested enforcement.

“A contingency makes the contract invalid”

No. A contingency commonly conditions performance or a termination right within a valid agreement.

A fast method for any classification question

1. Ask whether offer, acceptance and objective assent exist.
2. Check consideration, capacity and lawful purpose.
3. Check the required writing and signature.
4. Look for a protected party with a power to avoid.
5. Separate enforceability defenses from formation defects.
6. Ask whether material performance remains.
7. Choose every label the facts support.

If the question asks what happened after signing, it is probably testing executed versus executory. If it asks who may reject or ratify, it is probably testing voidable. If nobody ever agreed, do not invent a voidable contract.

Frequently asked questions

What is the difference between void and voidable contracts?

A void contract has no legal effect from the outset. A voidable contract operates unless the party protected by law elects to avoid it and may be capable of ratification.

What is the difference between executed and executory contracts?

An executed contract has been fully performed. An executory contract still has material performance due from one or more parties.

Is a signed real estate sales contract executed or executory?

If closing and other material duties remain, it is executory in the contract-classification sense even though the document has been executed in the sense of signed.

Is an oral contract to sell New York real property void?

The more precise general classification is unenforceable when it fails General Obligations Law section 5-703 and no exception applies. The next article in this series covers that rule and its exceptions.

Is a contract with a minor void in New York?

Generally, it is voidable by the minor, subject to statutory and common-law exceptions. New York treats age 18 as sufficient to prevent disaffirmance on the ground of infancy for current contracts.

Does breach make a contract voidable?

Not merely by itself. Breach can support termination, damages, specific performance or another remedy depending on the agreement and law, but it does not automatically undo formation.

Can a voidable contract become enforceable?

It can be ratified by the party entitled to avoid it when the legal conditions for ratification are met. Conduct after learning the facts or after the disabling condition ends can matter.

Is a contract with an illegal purpose void or unenforceable?

It can be void or unenforceable depending on the statute, public policy and precise agreement. For an actual transaction, a licensee should refer the issue to counsel rather than promise a classification or remedy.

The salesperson's boundary

A salesperson may explain basic curriculum concepts and accurately transmit approved documents. The salesperson should not decide for a client whether a disputed contract is void, advise a party to rescind or draft novel legal language.

When a real file raises capacity, fraud, duress, illegality, rescission or enforceability, involve the supervising broker and the party's attorney.

The educational exam label is a starting point. The legal result depends on evidence, precise language, defenses, remedies and procedural choices.

What to study next

Use the Contracts, Sales and Leases study hub to connect these classifications with offers, contingencies and remedies. Review the Law of Agency study hub for authority and ratification, and the Legal Issues study hub for capacity and interests in property.

Next, study offer, acceptance, consideration, capacity and lawful purpose in detail. Then learn why the New York Statute of Frauds usually makes a defective oral land agreement unenforceable rather than treating every writing problem as void.

Sources and verification notes

This article was checked against official sources on August 27, 2026. Contract classification is fact-sensitive. New York statutes, case law and the agreement's actual language control a real dispute.

1. New York State Department of State, Real Estate Salesperson 77-Hour Curriculum. Subject 4 contract elements and required key terms, including executed, executory, void and voidable.
2. Hogan v Bullock, 2024 NY Slip Op 06405. New York appellate treatment of a valid real estate contract, formation elements and interpretation.
3. Kowalchuk v Stroup, 2009 NY Slip Op 01014. Offer, acceptance, consideration, mutual assent and intent to be bound.
4. Wu v Uber Technologies, Inc., 2022 NY Slip Op 22388. Explanation of void, voidable, ratification and unconscionability distinctions under New York law.
5. New York General Obligations Law section 3-101. Current age-18 rule for disaffirmance on the ground of infancy.
6. New York General Obligations Law section 5-703. Writing requirement for specified real-property transactions.
7. New York Judiciary Law section 478. Prohibition on practicing or appearing as an attorney without admission.

This article provides general educational guidance. It does not reproduce live examination content or provide legal advice.