What defines a void contract?

A void contract is best understood as a contract that cannot be performed or enforced under the law. This means that the agreement lacks legal effect from the moment it is created, rendering it unenforceable in court. Examples of void contracts include agreements for illegal activities or contracts that involve parties who do not have the legal capacity to enter into a contract, such as minors or individuals who are mentally incapacitated.

This definition clarifies why this specific choice is correct, as it encapsulates the essence of what makes a contract void. A void contract does not create any legal obligations for the parties involved, which distinguishes it significantly from contracts that may be enforceable or modifiable, or those that require mutual consent. The other options present alternatives that do not accurately characterize a void contract, focusing instead on elements related to enforceability or modification of agreements.