What makes a contract of employment legally binding, and when might a contract be void or voidable?

• A. Mutual agreement enforceable by law; void if illegal, impossible; voidable if misrepresentation, duress, or incapacity.
• B. It is enforceable by law only if both parties sign a written contract.
• C. Mutual agreement enforceable by law; void if illegal, impossible; voidable if misrepresentation, duress, or incapacity.
• D. A contract is legal as long as the organization approves it.

Answer: (C)

The main idea is that a contract of employment becomes legally binding when there is mutual agreement between the employer and the employee that can be enforced by law. This means both sides have agreed to the terms (such as duties, pay, and working conditions) and the agreement is legally recognizable.

A contract is void if the subject matter is illegal or impossible to perform from the outset. In other words, if what is promised cannot legally happen or would require breaking the law, the contract has no legal force.

A contract is voidable if there is a flaw in how it was formed that allows one party to cancel it. Common grounds are misrepresentation (one party was lied to about important facts), duress (pressured into signing), or incapacity (the person was not able to understand or consent, such as due to age or mental state). In these cases, the contract is valid for now but can be annulled by the affected party.

Note that a contract doesn’t have to be written to be binding; many are oral, and an organization’s approval alone doesn’t determine legality. What matters is genuine agreement that meets the law and does not involve illegal terms.