Void Agreement vs Voidable Contract

Nature of Contract

A contract is a legally binding agreement between two or more parties that creates mutual obligations. It involves an offer, acceptance, consideration, and intention to create legal relations. However, not all contracts are enforceable under the law. Some contracts are void or voidable, which means they are either invalid from the beginning or can be canceled at the option of one or both parties.

Void Agreement

A void agreement is one that has no legal effect from the outset. It is void ab initio, meaning it is null and void from the beginning. A void agreement is not enforceable by law, and no rights or obligations arise from it. It is as if the agreement never existed. Examples of void agreements include:

- An agreement to commit a crime or fraud
- An agreement that is opposed to public policy
- An agreement that is impossible to perform
- An agreement that is based on a mistake of fact or law
- An agreement that is made by a person who lacks capacity to contract.

Voidable Contract

A voidable contract is one that is valid but can be canceled or avoided by one of the parties. The right to cancel or avoid the contract may arise from a defect in the contract formation, such as a mistake, misrepresentation, undue influence, duress, or incapacity. The party who has the right to cancel the contract may do so either by rescinding the contract or affirming it. If the contract is rescinded, both parties are released from their obligations under the contract. If the contract is affirmed, it remains in force, and both parties are bound by its terms. Examples of voidable contracts include:

- A contract entered into by a minor
- A contract induced by fraud or misrepresentation
- A contract entered into under duress or undue influence
- A contract based on a mistake of fact or law
- A contract entered into by a person lacking contractual capacity.

Conclusion

In conclusion, a void agreement is invalid from the outset, while a voidable contract is valid but can be canceled at the option of one of the parties. The difference between the two lies in the enforceability of the agreement and the grounds for cancellation. Void agreements are not enforceable, while voidable contracts can be enforced unless canceled by one of the parties.