what makes a contract invalid

A contract could be invalid due to fraud (e.g. I induce you to invest in my business by representing to you that its accounts receivable is 3 times as large as it actually is),  but usually the fraud has to relate to something in the contract itself.  For example, if the actual written investment contract you sign says nothing about the amount of the company's accounts receivable, your claim of an oral misrepresentation will probably be barred by what is known as the "parol evidencee rule.") A mistake can invalidate a contract, but only if it is a mutual mistake.  For example, if I sell you a mare which we both believe was fertile, but in actuality it is sterile, that mutual mistake might invalidate the contract.  If I know that the mare is infertile, however, there is no mistake.  In that case, you would have to show fraud (i.e. that the mare's infertility was material to the contract, that you relied on the mare being fertile in entering into the contract, and that I had a duty to disclose the infertility) in order to invalidate the contract. A contract can be invalidated because one of the parties lacks capacity to contract, either because of mental incompetence or youth. There are other grounds to invalidate a contract as well.  However, usually if you sign a contract, you are deemed to have read and understood it, and are bound by it.