An unenforceable contract is a valid contract that a court chooses not to enforce. It is important to note that an unenforceable contract is different from a void or voidable contract. A void contract is not legally valid, while a voidable contract occurs when one party is not legally bound to the agreement.

There are several reasons why a contract may be deemed unenforceable, including:

• Lack of capacity: All parties involved in the contract must have the capacity to understand what they are agreeing to. For example, a contract entered into by someone with a mental impairment may be considered unenforceable due to lack of capacity.
• Coercion: If one party is forced to enter into the contract against their will, the contract may be unenforceable.
• Undue influence: If one party has an unfair advantage over the other party and uses that advantage to influence the terms of the contract, the contract may be unenforceable.
• Misrepresentation and nondisclosure: If one party makes false statements or fails to disclose important information, the contract may be unenforceable.
• Unconscionability: If the terms of the contract are so one-sided that they are unfair to one party, the contract may be unenforceable.
• Public policy: If the contract goes against state or federal law, it may be automatically unenforceable.
• Mistake: If there is a mistake in the contract that significantly impacts its creation or performance, the contract may be unenforceable.
• Impossibility: If it is impossible to perform the terms of the contract, the contract may be unenforceable.

If a contract is deemed unenforceable, the court will not compel a party to act or compensate the other for not fulfilling the contract terms.