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It is very usual that people get easily confused between void contract and voidable
contract, although they both are two different types of contract. Void Contract is
the contracts that cannot be enforceable, but the Voidable Contract is the contract
in which one party has the right to enforce or rescind the contract. Now, moving on
to our topic, difference between Void and Voidable Contract.
1. Comparison Chart
2. Definition
3. Key Differences
4. Examples
5. Conclusion
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BASIS FOR
VOID CONTRACT
COMPARISON
Meaning
VOIDABLE
CONTRACT
as void contract.
option to enforce or
rescind it, is known as
voidable contract.
Defined in
Nature
Reasons
Subsequent illegality or
Rights to party
independent.
No
Void contract is the contract which are not enforceable in the court of law. At the
time of formation of the contract, the contract is valid as it fulfills all the necessary
conditions required to constitute a valid contract, i.e. free consent, capacity,
consideration, a lawful object, etc. But due to subsequent change in any law or
impossibility of an act, which are beyond the imagination and control of the parties
to the contract, the contract cannot be performed and hence it becomes void.
Further, no party cannot sue the other party for the non-performance of the
contract.
The contract becomes void due to the change in any law or any government policy
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for the time being in force in India. Along with that the contracts which are
opposed to public policy also ceases its enforceability. Contracts with incompetent
persons are also declared void like minor, persons of unsound mind, alien enemy
or convict etc.
Voidable Contract is the contract which can be enforceable only at the option of
one of the two parties to the contract. In this type of contract, one party is legally
authorized to make decision to perform or not to perform his part. The aggrieved
party is independent to choose the action. The right may arise because the consent
of concerned party is influenced by coercion, undue influence, fraud or
misrepresentation etc.
The contract becomes valid until the aggrieved party does not cancels it. Moreover,
the party aggrieved party has the right to claim damages from the other party.
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The major differences between void contract and voidable contract are as
under:
1. A contract which lacks enforceability is Void Contract. A contract
which lacks the free will of one of the parties to contract is known as
Voidable Contract.
2. Void Contract is defined in section 2 (j) while Voidable Contract is
defined in Section 2 (i) of the Indian Contract Act, 1872.
3. A void contract was valid at the time when it is created, but later on it
becomes invalid. Conversely, voidable contract is valid until the
aggrieved party, does not revokes it within stipulated time.
4. When it is impossible, for an act to be performed by the parties it
becomes void, as it ceases its enforceability. When the consent of the
parties to the contract is not free, the contract becomes voidable at the
option of the party whose consent is not free.
5. In void contract, no party can claim any damages for the
non-performance of the contract. On the other hand, the aggrieved
party can claim damages for any loss sustained.
A promises B to sell his horse after one month to B for Rs. 50,000. Before the
completion of one month, the horse died. Now, the contract becomes void as
the contract cannot be performed, i.e. the object on which the parties agreed
is no more so there is an impossibility of performance of contract. This type of
Contract is known as Void Contract.
X says to Y, that he should sell his new bungalow to him at a nominal price
otherwise, he will damage his property and Y enters into a contract due to
fear. In this situation, the contract voidable as the consent of Y is not free, so
he has the right to avoid the performance of his part. As well as he can claim
for any damages caused to him.
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There are many contracts which are valid, but sometimes due to certain
circumstances, they cease to be enforceable which makes them a void
contract because it is impossible that the contract is to be further executed.
Similarly, there are many people who unlawfully induce or persuade the will of
another person to enter into a contract, which becomes voidable at the option of
the party whose consent was so induced.
Difference Between
Agreement and Contract
Difference Between
Fraud and
Misrepresentation
Difference Between
Coercion and Undue
Influence
Difference Between
Agreement and
Memorandum of
Understanding (MoU)
Difference Between
Indemnity and
Guarantee
donatus says
July 31, 2015 at 2:24 pm
It was helpful thank u
Reply
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Surbhi, you doing a great job by helping us, All your post are
helpful..thanks Surbhi..
Reply
Gretta says
October 7, 2015 at 8:36 am
Perfect, it is really helpful
Reply
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