Void agreements and voidable contracts are agreements that can be enforced legally or may be considered illegal.
Contracts are needed to be signed for anything under the umbrella of legal, banking, property, institutional grounds. Hence, contracts by default come under legality but not necessary all contract is considered to be legal.
Void vs Voidable Contract
The main difference between void and voidable contracts lies in the fact that a void contract is considered to be illegal and unforeseen while the voidable contract is a legal bond wherein any one of the parties involved can enforce or nullify the contract on legal terms.
Void means ‘Voi ab initio’ in-law terms which mean null or void.
Void agreements are nullified from the very beginning while voidable contracts are valid from the beginning and can get void later on.
A void agreement is usually considered valid only at the time when it was created but later can be considered invalid while the voidable contract is considered to remain active until one of the parties calls it off or the stipulated time of the validity of a contract ends.
No parties can claim damages that occur as per the void agreement but the claim can be made in the voidable contract as they are legalized.
Comparison Table Between Void and Voidable Contract (in Tabular Form)
| Parameter of Comparison | Void Agreement | Voidable Contract |
|---|---|---|
| Terminology | Void agreement is unenforceable having no legal consequences | Void contract is considered to be valid which cease only when an enforceable event makes the contract void. |
| Validity | Never valid | Valid until ceased |
| Contracts prerequisite | Not satisfactory | Satisfactory at the beginning. Circumstance brings to a non-satisfactory closure |
| Void ab-initio | Void since the start | Gets void later on |
| consequences | No legal consequences | Legal conquences |
| Restoration | Not allowed | Allowed when a contract is noted to be void |
What is Void Agreement?
The void agreement mainly plays in situations that are illegal. The illegal underpinning can be at a national level or business dealings.
Simply put, one can say that the void agreement gets void when one of the party attempts to go away astray from the legally binding precursors. Hence is the contract of void agreement is void, no enforcement can take place from both the parties
When a void contract or agreement is made into effect all the potential consideration is looked into at the time of bringing the deal into an agreement.
But due to a change of plans or a situation beyond the capacity to rectify a situation or an involvement of a minor, the void agreement can be nullified without legal hassles. As there are no legalities involved, no parties can sue each other.
What is Voidable Contract?
Just like avoid contact, a voidable contract too has two parties involved in an agreement but bound under the law and governing policies.
This voidable contract can be enforced, aggrieved, independent and action-oriented. Any step taken by default mandates the consent of all the parties involved to take a mutually decided decision.
Actions, reactions, processes, and further proceedings as per void agreements hold validity in situations that can be payment, documentation or of products and items that are of value.
The meaning of voidable merely means that the inbound party with its power can cancel the agreement but with mutual consent.
If the voidable agreement is not followed the outbound party has the right to seek a legal route.
Main Differences Between Void and Voidable Contract
Terminology
There are no rights or recursions if one of the party cuts off as Void agreement has no legal connotations as a consequence attached.
Also, there are no obligations as and the contract is considered to be null from the very beginnings.
Avoidable contract, on the other hand, is a valid contract having validity as well. A voidable contract is also foreseen and enforced by the law.
A voidable contract becomes nullified, only when it lacks the enforceability of the bonds or if one party wants to take a step back. To take a step back is also called to rescind.
Validity
and Void ab-initio
Void ab-initio is just to resurface the legal term of what is meant by void.
A void agreement can for sure be validly law-driven however voidable contract calls out for both the inbound and outbound parties to be existential to explicitly avail legal concur.
A void agreement was never valid from the very beginning while the validity plays a little differently for the voidable contract.
As per the legal entailments, there is a period of sustainability in legal bonds when a contract is voidable. Everything is crystal and clearly mentioned in the contract.
Contract
Prerequisite and the Consequences
The contract prerequisite
from the start is not at par in a void agreement while the contract, terms,
legal penalties, logistics, etc are explicitly drawn and understood beforehand.
The termination of a void agreement takes shape when there are illegal actions and where there is an absence of any consequences or essentials to take to a legal fight hence to fetch and give adverse or needed consequences is likely to occur.
The causes, actions, cause, and effects of any consequences as per a voidable contract occur when the contract is to its natural end or a brought to end.
Restoration
Any kind of restoration is not allowed in the case of the void agreement as any which ways the contract doesn’t exist in actuality.
The legal reconciliation or restitution occurs or rather is permitted only when a voidable contract is nullified, dissolved or seize to exist.
Conclusion
Contracts, if made, are always considered to be valid but they do cease to exist during unlawful or certain event-based circumstances. I suggest to read each and every reference in-depth to get more understanding of the legal binding sections, examples technicality, etc.
References
- https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/modlr27§ion=34
- https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/soaf72§ion=12