However, it can be rejected by one party if the contract is discovered to have defects. If a party with the power to reject the contract chooses not to reject the contract despite the defect, the contract remains valid and enforceable. While it may seem like void contracts and voidable contracts are the same, there are differences you need to understand.

A void contract is one that is unenforceable from the moment it is created. Due to how it was written or the terms outlined in it, a void contract was never legally valid. A contract may be void if it is found that one of the parties was incapable of fully understanding its implications or was a minor when it was signed.

Void contract

For example, an agreement to sell illegal drugs would not be a valid, enforceable contract. The court system generally will not enforce contracts if the underlying purpose is illegal. Specifically, not revealing defects or other important information about a product can be considered fraudulent misrepresentation or undue influence. This makes the contract voidable at the option of the innocent party, who was unfairly persuaded to enter into the agreement. A contract is considered void if it involves illegal activities, lacks consideration, or if one of the parties lacks the legal capacity to enter into a contract (e.g., a minor or a mentally incompetent person). Additionally, contracts that are impossible to perform may also be considered void.

Are contracts entered into by minors always voidable?

He is, it is sometimes said, ‘a mere mechanical instrument.’ The result is that there is no contract at all, or a ‘void contract’ as distinguished from a voidable one” (emphasis added). When a contract is deemed void, it’s as if the contract never existed legally speaking. Hence, anything you did under the void contract is generally not recoverable, and you can’t seek restitution. However, it’s best to consult with a legal professional about your particular situation to understand the possible remedies open to void vs voidable contract you.

What are the legal remedies available for a voidable contract?

A voidable contract, on the other hand, is initially valid and enforceable but can be voided by one of the parties if certain conditions, such as fraud or misrepresentation, are met. Voidable contracts are legally enforceable until they are voided by one party. If a party chooses to void the contract, they are typically entitled to seek remedies. The remedies depend on the grounds for voiding the contract but may include rescission, restitution, or damages.

Using threats, coercion, or taking advantage of vulnerabilities to obtain consent often voids a contract. If a party did not truly consent freely due to duress or manipulation, that agreement can potentially be void. Examples include threatening physical harm unless someone signs a contract. In contrast, a void contract is one that has no legal force whatsoever due to an illegality or public policy violation.

1. A contract can also be void due to the impossibility of its performance.
2. The contract becomes void because of the changes in any law or any government policy for the time being in force in India.
3. Depending on what you are dealing with (employment, lease, partnership, etc.), always confirm the other party’s identity before signing.
4. Consideration means that both parties agree to provide something of value in the agreement they sign (money, car, property, manual labor, etc.).
5. If both parties make a substantial mistake regarding an important aspect of the contract, it may be voidable.

Real-World Examples of Void Contracts

This includes agreements where one party withheld information or intentionally provided inaccurate information. Laws for certain types of contracts require disclosing specific kinds of information. Even if some contract terms are voided, the agreement may remain enforceable through severability provisions. However, material terms found unenforceable could still undermine the entire contract.

1. Voidable also are contracts induced by undue influence, where a weak will is overborne by a stronger one.
2. These can include a failure to disclose a material fact by one party or the other; a misrepresentation or mistake in the contract; fraud; terms that are unconscionable; or a breach of contract.
3. You should never try to be your own lawyer, but it’s always a good idea to learn enough law to understand the advice your lawyer gives you.
4. If a party chooses to void the contract, they are typically entitled to seek remedies.

A voidable contract is a contract in which one of the parties has the option to reject or enforce the contract when the terms of the agreement are not accurately respected or represented. That could mean the information in the contract was not accurate in the beginning or one of the parties didn’t respect the deal entirely. The second kind of duress is duress by threat; it is more common than physical duress. Here the perpetrator threatens the victim, who feels there is no reasonable alternative but to assent to the contract.

Suppose that as part of the original purchase price, Olson agrees to make all necessary repairs and replace all failed parts for the first ninety days. At the end of one month, the transmission dies, and Jack demands a replacement. Olson refuses to repair the car unless Jack signs a contract agreeing to buy his next car from Olson. But if Jack needs the car immediately and he is impecunious, then the threat would be improper and the contract voidable. It depends on whether the new contract is fair and equitable because of unanticipated circumstances. If, for example, Olson discovers that he must purchase a replacement transmission at three times the anticipated cost, his threat to hold up work unless Jack agrees to pay for it might be reasonable.

In situations like these, the victimized party can potentially have the contract cancelled if they can demonstrate the other party used undue influence to obtain their consent. For example, if a person signs a contract under false assumptions due to a lie or misleading information from the other party, that contract would become voidable. The deceived individual could then choose to cancel or disaffirm the contract. You’ll learn the precise legal meaning of void and voidable, see real-world examples, and gain clarity on this complex area of law. It can never become a valid contract, even on the expiry of a reasonable time. A contract may be ruled null and void should the terms require one or both parties to participate in an illegal act, or if one party becomes incapable of meeting the contract terms.