Void agreement vs void contract definitions, meanings, differences

Because every contract is different, determining its validity can be difficult. Consideration is one of the most essential prerequisites to form a valid contract. An agreement without consideration is a void agreement according to Section 25 of the Act, although some exceptions to an agreement without consideration do apply which does not render the agreement void. It is important to understand the difference between the terms agreement and contract, although they are used interchangeably in common parlance. In legal jargon, the phrases agreement and contract have different connotations. The promisor is the person or party who offers to do something or get something done, and the promisee is the person or party who accepts the offer.

1. A contract is regarded as voidable when it is entered into without the parties’ free consent.
2. If the aggrieved party does not rescind the contract within a reasonable time, it may be declared valid.
3. So, here we are going to havein-depthepth discussion on the difference between void agreement and void contract, So, let’s get started.
4. They’re considered null and void by law and the courts will not intervene to enforce any of its terms.
5. Taylor v. Caldwell (1863)– in this case, the defendants let the plaintiffs use a particular music hall.
6. The only similarity between a void and voidable contract is that both are different types of contracts under the Contract Act.

For example, you could sign a contract that is legal, but before fulfilling the contract the law changes and makes the contract illegal, and therefore it becomes void. That means the required legal age and mental capacity to sign a contract. This can be understood difference between void agreement and void contract through the illustration- ‘A and B ran the same type of business in the same Calcutta neighborhood. B agreed to pay A a certain sum if A closed his business in that area. After closing his business, A filed a lawsuit against B to recover the promised amount.

Voidable Contract

Such contracts do not have any legal effect and cannot be enforced by either party. Imagine a business contract in which one party agrees to supply illegal materials. This contract is void from the start because it involves illegal activity and is therefore unenforceable.

Legality or legal stance

In simple words, void contracts are those contracts which can’t be enforced by law and don’t have any legal effects. That means gifts can’t be legally enforced even if you sign a contract, because they are offered in generosity and that’s not legally binding. If you offer someone a gift in exchange for manual labor, that will be legal because there is something of value offered in return. It has been observed that the terms void agreement and void contract are used continuously interchangeably or in the place of one another which results in ambiguity and lack of understanding between various parties.

A void agreement does not create any right or obligations to the parties involved because the law as it lacks the basic principles to be considered does not recognize it. On the other hand, a void contract creates rights and obligations to all the parties involved. A party enjoying goods and services as his or her rights must pay for those goods in the sum of money agreed upon which failure to pay will be enforced under the legal provisions. Additionally, the party who has the right to be paid must deliver goods and services in the agreed quality and form. This means that such contracts do not have any legal effect and no party involved can enforce the contract. In a void agreement, the prerequisite conditions are not met if there is impossibility to perform or the contract is with minor, lunatic or alien enemy.

These elements include illegality, incapacity, or violations of public policy. In contrast, voidable contracts commence as valid and binding agreements. https://1investing.in/ They only become voidable due to certain later actions or circumstances, such as misrepresentation, duress, or lack of free consent.

Other Considerations

She holds a sound academic record, having scored 93.80 % in AISSE and 95% in both Political Science and English Language in AISSCE. She has held prestigious positions in the Student Council and been adjudged the ‘Student of the Year 2016, Gurgaon’ by UnivQuest. She has formerly served as a legal intern at ubadvocate, where her performance was marked “outstanding” by the team and is an Editor at The Wall of Justice blog.

What Is a Contract?

A void agreement is void from the day, it is created and can never turn into the contract. In a void agreement, crucial elements of a contract, which include consideration, offer, acceptance, and capacity to contract among others, are missing. Therefore, the contract does not exist and is not recognized under the law of contract, which prevails in different countries around the world. On the other hand, all the necessary elements of a contract can be ascertained at the beginning, which makes it a valid contract. However, the contract becomes voidable because the consent of one of the parties involved in the contract is not free.

Also, information that was previously unknown to parties engaging in the contract can also make the contract void. As all contracts are unique, it is often difficult to judge their validity. The only similarity between a void and voidable contract is that both are different types of contracts under the Contract Act. If both parties act under a joint misunderstanding of fact, the contract may be voidable.

To become void agreement, it must meet the essentials which are mentioned in section 10 of the act. In simple words, it is not enforced by law which means that the parties which are involved in agreements have no rights and can’t be challenged in courts. Void contracts give no option to both parties while voidable contracts give options to one of the parties.

This is often the most practical and straightforward resolution, as it avoids lengthy legal battles and disputes. As such, you should seek legal advice and thoroughly review the terms of any contract to avoid entering into a void agreement. When talking about contracts, it’s easy to get confused between a voidable contract and a void contract. A different type of voidable contract would be an agreement between a company and a minor outlining the minor’s employment. This means that if your contract is missing any of the basic elements of a legal agreement, it’s automatically void and can’t be upheld in court.

Money lender was aware of the fact that D was a minor, he still lent the money. The privy council held that the agreement was void ab initio and the lender was not entitled to repayment of the money. Another example would be signing a contract with one of the parties under the legal age. The minors can enter into contracts but they can breach the terms without legal repercussions since they don’t have the legal age. When it comes to light that one party was under the legal age at the moment of signing the contract, they can choose to ratify the contract when they are legally capable or void it.

Of course, most businesses work with much more complex and important legal agreements, but the principle of a voidable contract is the same regardless of value or importance. Perhaps circumstances out of your control mean you can’t perform the tasks outlined in the agreement. In this case, both parties might mutually agree to void the contract. When the parties to an agreement are under different impressions about a matter of fact that is essential to the agreement, the agreement is void.