Future Business Leaders of America (FBLA) Business Law Practice Exam

What is meant by a voidable title?

1. A title that can be transferred without consent

2. A title that must be honored by all parties

3. A title that may be canceled at the discretion of the injured party

4. A title that is invalid under all circumstances

The correct answer is: A title that may be canceled at the discretion of the injured party

A voidable title refers to a situation where a party holds a title to property that may be legally affirmed or canceled depending on the decisions of the injured party involved in the transaction. This means that while the title is initially valid and can support the transfer of ownership, it is subject to being voided due to certain circumstances, like fraud or misrepresentation, that affect the agreement. In this context, the ability for the injured party to cancel the contract highlights the fundamental nature of a voidable title. For example, if someone sells a car under duress or without the legal right to do so, the other party may choose to void the transaction after realizing the circumstances that led to the insecurity about the title. The other options represent different concepts that do not accurately define a voidable title. For instance, a title transferred without consent does not reflect the nuances of both parties' agreement; a title that must be honored by all parties describes an enforceable title that lacks the ability to be voided; and a title that is invalid under all circumstances indicates a totally void title, which is fundamentally different from one that can be canceled at the discretion of the injured party.