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In this video tutorial, the speaker explains the differences between valid, void, and voidable contracts. A valid contract meets all essential elements of contract law, illustrated by an example where a buyer signs an agreement to purchase a blue house, which is indeed blue. Conversely, a voidable contract arises when a contractual agreement allows for cancellation due to discrepancies; for instance, if the agreed blue house turns out to be green, the buyer can choose to rescind the contract but is not obligated to do so. Additionally, contracts can be voidable if they involve fraud, misrepresentation, or are signed under duress, such as coercion.