Difference between void agreements, void contracts and voidable contracts are discussed here. We earlier studied, the definition of a valid contract has been provided under section 2(h) of the Act as to "when an agreement is enforceable by law is a contract." Based on the validity of the contract there are several types of contracts i.e. void contract, voidable contract and valid contract etc.
In this article, we gonna discuss the difference between void agreement, void contract and voidable contract.
Meaning and Definition of Void Agreement
The meaning and definition of a void agreement are provided under section 2 (g) of the Indian Contract Act, 1872 as " An agreement not enforceable by law is void."
Therefore, void agreements are those agreements that are not enforceable by law. Thus, the parties to the void agreement do not get any legal remedy. There is no difference between void agreement and unlawful agreement.
The conditions laid down under section 10 of the Indian Contract Act, 1872, if not fulfilled then the agreement would be void. Sections 26 to 30 and section 56 of the Act are examples of void agreements.
Example: An agreement to sell smuggled goods is a void agreement.
Meaning and Definition of Void Contract
The meaning and definition of a void contract can be found under section 2 (j) of the Indian Contract Act, a void contract means, "A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable."
In simple words, a void contract is a contract that is not legally enforceable since when the contract was made. The void contracts are treated as they never existed and they are not enforceable in the courts.
Example: A agrees to buy goods from B for a certain price in the next year. But meanwhile, B dies. There are no chances for the performance of a contract. Thus, the contract is not valid.
Difference Between Void Contract and Void Agreement
So, let's see the difference between void contract and void agreement;
| Void Contract | Void Agreement |
|---|---|
| Void Contract is defined under section 2 (j) of the Indian Contract Act, 1872. | Void Agreement is defined under section 2 (g) of the Indian Contract Act, 1872. |
| Void Contract means, "A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable." | Void Agreement means, "An agreement not enforceable by law is said to be void." |
| In a Void Contract, a contract would be void when one party fails to perform his obligation due to certain reasons. | Void Agreements are void ab initio means they are void from the beginning. |
| Void Contracts are unenforceable. | Void Agreements cannot be enforceable. |
| Example: A agrees to buy goods from B for a certain price in the next year. But meanwhile, B dies. There are no chances for the performance of a contract. Thus, the contract is not valid. | Example: An agreement to sell smuggled goods is a void agreement. |
| In Void Contract, award and compensation would be granted. | In the Void Agreement, award and compensation could not be granted. |
| In Void Contract, the essentials of a valid contract are not available. | In Void Agreements, essential elements of valid contracts are not available. |
| In Void Contract, there is no chance of performance of a contract. | In Void Agreements, there is no chance of the performance of a contract. |
| In Void Contract, no legal remedy is available. | In Void Agreements, no legal remedy is available. |
Meaning and Definition of Voidable Contract
The meaning and definition of a voidable contract are provided under section 2 (i) of the Indian Contract Act, voidable contract means, "An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract."
In simple words, in these types of contracts, one of the parties to the contract will have an option to perform or cancel the validity of the contract. If the aggrieved party affirms such contracts then it would be a valid contract and if the aggrieved party rescind/challenge the contract then the contract would be a void contract. Such types of contracts are known as Voidable Contracts.
Example: X wants to buy a property (A) that belongs to Y, But Y is not willing to sell his property. But X forcefully buys it from Y and paid a certain amount to Y. Then, it is on the Y either accept this forceful transaction and make a contract valid or he can take defence for the contract is not valid.
Difference Between Void and Voidable Contracts
Besides, the difference between void agreement and voidable contract, let's see the difference between void contract and voidable contracts;
| Void Contract | Voidable Contract |
|---|---|
| Void Contract is defined under section 2 (j) of the Indian Contract Act, 1872. | Voidable Contract is defined under section 2 (i) of the Indian Contract Act, 1872. |
| Void Contract means, "A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable." | Voidable Contract means, "An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract." |
| In a Void Contract, a contract would be void when one party fails to perform his obligation due to certain reasons. | In a Voidable Contract, a contract is voidable at the option of one or more parties. |
| Void Contracts are unenforceable. | Voidable Contracts can be enforceable when an aggrieved party gives affirmation. |
| Example: A agrees to buy goods from B for a certain price in the next year. But meanwhile, B dies. There are no chances for the performance of a contract. Thus, the contract is not valid. | Example: X wants to buy a property (A) that belongs to Y, But Y is not willing to sell his property. But X forcefully buys it from Y and paid a certain amount to Y. Then, it is on the Y either accept this forceful transaction and make a contract valid or he can take defence for the contract is not valid. |
| In Void Contract, award and compensation would be granted. | In a Voidable Contract, award and compensation can be granted. |
| In Void Contract, the essentials of a valid contract are not available. | In a Voidable Contract, the consent of the party is not free. |
| In Void Contract, there is no chance of performance of a contract. | In a Voidable Contract, when the other party does not rescind the contract and gives his affirmation within a reasonable time, then the contract can be performed. |
| In Void Contract, no legal remedy is available. | In Voidable Contract, the aggrieved party has a remedy to cancel the contract. |
- Law of Contract - Bare Act 2021 Edition Professional
- The Indian Contract Act 1872 Bare Act 2021 Edition
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- Pollock & Mulla - The Indian Contract Act, 1872
- CONTRACT Paper I - By R.K. Bangia [Edtion 2019 - 2020]
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- NOTES ON INDIAN CONTRACT ACT 1872: BEST NOTES FOR LAW STUDENTS