What best describes a voidable contract?

A voidable contract is defined as a valid contract that may be legally enforced but can also be rejected or voided by one of the parties involved due to specific circumstances. This characteristic differentiates it from a void contract, which is not enforceable by either party.

When considering this definition, the correct choice reflects the nature of a voidable contract, indicating that while it is a legally recognized agreement, one party has the power to decide not to uphold their obligations if certain conditions arise, such as misrepresentation, undue influence, or a lack of capacity. In this sense, the contract remains binding unless the party with the right to void it decides to exercise that right.

Understanding this concept helps clarify why the other options are not suitable. A legally recognized and binding contract refers more to an enforceable agreement without conditions, while a contract that is legally insufficient does not meet the criteria for contract formation at all, and is therefore not recognized. An enforceable contract under certain conditions might align with the notion of a voidable contract, yet it does not capture the essence that one party has the option not to adhere to it, which is the defining feature of voidability.