An attempted contract that is made for an illegal purpose or that is against public policy cannot be enforced by either party and is void. In contrast, a contract that is made by a minor (usually under age 18), or that is based on a mutual mistake, or that was made on the basis of a fraudulent misrepresentation by one party, is voidable and may be rejected by a party who was at a disadvantage when the contract was made. A voidable contract may also be ratified and accepted by such a party—after a child reaches the age of majority (usually 18), or the parties become aware of their mutual mistake, or a party learns of the other party’s misrepresentation and proceeds with performance of the contract.
In South Dakota, contracts made for illegal purposes or against public policy are void and unenforceable. This aligns with general contract law principles that prohibit the enforcement of agreements that involve illegal acts or that significantly contravene societal standards. On the other hand, contracts involving minors, mutual mistakes, or fraudulent misrepresentations are categorized as voidable. This means that the disadvantaged party, such as a minor, a party to a mutual mistake, or a victim of fraud, has the discretion to either reject or ratify the contract. In South Dakota, the age of majority is 18, at which point a person gains the legal capacity to enter into binding contracts. If a minor chooses to ratify a contract upon reaching the age of majority, the contract becomes fully enforceable. Similarly, parties to a contract based on a mutual mistake or fraud have the option to affirm the contract upon discovering the mistake or misrepresentation, thereby making the contract binding.