VOID AND VOIDABLE CONTRACTS
- Void Contract:
“The contract in which one or more
conditions necessary for a valid contract are not satisfied which renders the
contract unenforceable in a court of
law”.
An act can be Void because of any of the following reasons:
- Contracts
involving an illegal subject matter
or consideration such as
gambling, prostitution, or committing a crime.
- Contracts in
which one party is not mentally competent (mental illness or minors).
- Contracts that
require performing something impossible or depends on an impossible event.
- Contracts that
are against public policy because they are too unfair.
- Contracts that
restrain certain activities (right to choose who to marry, restraining
legal proceedings, the right to work for a living, etc.).
- A Bilateral mistake of fact[1];
when both the parties in an agreement are under a mistake as to a matter
of fact essential to the agreement, the agreement will be void.
E.g. A agrees to buy a certain horse from B. It turns out that the horse was dead at the time of bargain,
through neither party was aware of the fact. The agreement is void.
- Voidable Contract:
“The contract in which one or more
conditions necessary for a valid contract is
not satisfied, so one or both the parties to the contract can void the
contract at any time. As a result, you may not be able to enforce a voidable
contract”.
A contact maybe rendered voidable by any of the following:
- Contracts in
which one party is a minor.
- Contracts where
one party was forced or tricked into entering it i.e. involve coercion,
undue influence, fraud, misrepresentation.
- Contracts
entered when one party was incapacitated (drunk, insane, delusional).
[1]
Mistake of Law or Fact may or may not render a contact void or voidable, the
detail is way above the students of
Legal Jargon
