Difference between Void and Voidable Contracts

Sachet Labroo

2018-23 BA LL.B DIV- E PRN- 18010223101

Symbiosis Law School, NOIDA

Symbiosis International (Deemed University), Pune

In

JANUARY, 2019

Under the guidance of

Dr Kanan Diwetia

&

Ms Pallavi Mishra

Assistant Professor

SYMBIOSIS LAW SCHOOL, NOIDA

 Introduction
Void contracts are described under Section 2(j) of Indian Contract Act.
Those contracts which are unenforceable before the law. It is not
considered as the valid contract, hence even if a person breaches that
agreement; one cannot claim or recover anything because there was no
valid contract. The law cannot entertain those contracts.

If any part of a consideration, for one or more objects is unlawful, the

agreement is said to be void.

The following types of agreements are said to be void:

a. The agreements of which consideration and objects are unlawful in

part are said to be void.
b. Agreements without consideration are void.
c. Agreement in restraint of marriage.
d. Agreement in restraint of trade.

e. Agreements in restraint of legal proceedings. 1

f. Unmeaning agreements.

g. Wagering agreements.
h. Agreements to do impossible acts.

Voidable contracts are a formal agreement between two parties that

may be unenforceable because of a number of legal reasons. The reasons
that may be responsible for the voidable contract may be as follows:

I. Contracts entered when one party was a minor. Minor’s contracts

are not enforceable hence they can walk away from the contract
anytime.
II. Contracts where one party was misrepresented or any fraud was
done before entering into the contract.
III. If there was any undue influence while entering into the contract.
IV. If one or more terms in the agreement that are unconscionable.

This project mainly focuses on the differences between void and voidable
agreements.

1
Subs. by Act 1 of 1997, s. 2, for certain words (w.e.f. 8-1-1997)
Void contracts are considered to be legal contract that is invalid, even
from the beginning.

EXPLAINATION OF THE TOPIC

When an agreement is valid before the court of law, it is said to be

contract. However on the basis of validity there are several types of
contract. Some of the contracts are listed below:

Valid contract, void contract, illegal contracts etc.

Void and Voidable contracts are understood as same but they are
different. Void contracts are generally those contracts which are not
enforce before the court of law whereas Voidable contracts are those
contracts where one party has the right to enforce or end that contract.

We can differentiate these two contracts on many basis.

 On the basis of meaning

Void contracts are those contracts that cannot be enforceable before the
court of law.

There are several reasons that can make a contract void:

 If any consideration or objects in the contract is unlawful- If any single

part of consideration or one or more objects of the contract are
unlawful then the contract is said to be void.

 Contracts without consideration are void unless it is in writing or is a

promise to compensate something- If it is a promise to compensate
partially or wholly to the other party. A contract to which the consent
of the promisor is freely given is not void.

 Contracts in restraint of the marriage are void- Any contract in

restraint to the marriage of any person, other than minor is void.
 If any contract is entered by someone who is not mentally competent
that can be mentally ill person or minor.

 The contracts that are against the public policy are void. As they are
too unfair and hence cannot be enforced before the court of law.

 Contracts that restrain certain activities like right to choose who to

marry, right to work for a living etc.

Voidable contracts are the valid agreements, but in voidable

agreements one or both the parties can void the contract at any time. As
a result one may not able to enforce that contract. Few examples of the
voidable contracts are below:

 Contracts entered when one of the party as minor. The law considers
the minors incapable of entering into a contract hence the minor can
walk out of the contract anytime.

 The contracts made when one or the other party was tricked or forced
to enter into a contract. The aggrieved party can back out of the
contract anytime as the contract was not free of consent and it was
maliciously done.

 Contracts entered when one party was incapacitated (drunk or insane)

On the basis of Nature

2

Void contracts are valid, but become invalid due to some of the some
reasons. For example the contract was illegal.

Voidable contracts are valid until any of the party revokes the contract.
The party can revoke the contract because of many reasons like the
consent was not free or the party was tricked while entering into the
contract.

1. Exceptions 2 and 3 rep. by Act 9 of 1932, s. 73 and Sch. II. 2. Subs. by Act 1 of 1997, s. 2, for certain words
(w.e.f. 8-1-1997). 3. The second clause of Exception 1 to section 28 rep. by Act 1 of 1877, s. 2 and Sch. 4. Cf.
the Arbitration Act, 1940 (10 of 1940) and the Companies Act, 1956 (1 of 1956), s. 389.
On the basis of Rights to the party

In Void contracts there is no right to any of the party as the contract is

not enforceable before the law, hence no compensation or any right is
given to any of the party.

While in Voidable contracts the rights are given to the aggrieved party.

As they have entered into the contract with due influence or had been
tricked. They had no intention to enter into the contract.

Exemption 1— Saving of agreement to allude to intervention debate that

may emerge— This segment will not render unlawful an agreement, by
which at least two people concur that any debate which may emerge
between them in regard of any subject or class of subjects will be alluded
to intervention, and that as it were the sum granted in such assertion will
be recoverable in regard of the debate so alluded.

Special case 2.— 3

Saving of agreement to allude addresses that have just emerged.— Nor

will this area render illicit any agreement recorded as a hard copy, by
which at least two people consent to allude to intervention any inquiry
between them which has just emerged, or influence any arrangement of
any law in power for the time being as to references to arbitration

Both void and voidable contracts are the forms of legal contracts. A void
contract is invalid from the beginning itself and it cannot been enforced.

While no law is set up to help a void contract as a substantial, existing

contract, somewhere around one gathering included can be bound by a
voidable contract. Neither commitments nor rights are related with a void
contract. With the voidable contract, which is secured under the law, just
a single gathering has the choice of whether to proceed with it or revoke
it. Legitimate obligation can't be surveyed on either gathering to the
agreement if it's void, however the voidable contract is maintained until
the point that the unbind able party revokes it.

At the point when an agreement is never again enforceable, it winds up

void. At the point when strategies like intimidation, deception, or

3
The second clause of Exception 1 to section 28 rep. by Act 1 of 1877, s. 2 and Sch
extortion are utilized in building up an agreement, it ends up voidable. An
agreement that is void can't be made into a legitimate decrease by two
gatherings consenting to the agreement since you can't lawfully consent
to accomplish something that is unlawful. A voidable contract,
nonetheless, can be made substantial by the gathering who isn't bound,
on the off chance that they consent to surrender the privilege to revoke
the agreement.

At the point when an agreement is ruled void, the court regards it as

though it never existed. At the point when an agreement is ruled
voidable, it can turn into a void contract dependent on the conditions that
were set up when the agreement was shaped or it very well may be
evaded under the law. Additionally, one gathering, or conceivably both,
has a choice to void the agreement. With a void contract, one or the two
gatherings need to accomplish something that is either difficult to do or
illicit to do.

LITERATURE REVIEW

 THE INDIAN CONTRACT ACT, 1872:

The Indian Contract Act, 1872 recommends the law identifying with
contracts in India. The Act was passed by British India and depends on
the standards of English Common Law. It is relevant to every one of the
conditions of India with the exception of the province of Jammu and
Kashmir. It decides the conditions in which guarantees made by the
gatherings to an agreement will be lawfully official and the requirement of
these rights and obligations. DEFINITION: Under Section 2(h), Indian
Contract act characterizes Contract as an understanding which is
enforceable by law.

The Indian Contract Act, 1872 was the most helpful literature that guided
to complete the project. Indian Contract Act consists of all the sections
and the contracts that are there in the contract. All the necessary
information was there. It consisted of the meaning of void agreements
and all the conditions that are responsible for a contract to be void. Like
contracts that are unlawful are considered to be void hence they cannot
be enforceable before the court of law.
It consisted of all the explanations and the illustrations that were related
to void contracts. It was the most helpful literature that helped to
complete the project.

 SINGH AVTAR; VOID AND VOIDABLE AGREEMENTS

In the Avtar Singh Void Agreements were clearly defined. And there were
many illustrations and examples that were helpful in understanding the
topic and successfully completing the project. Void agreements were
defined clearly in the book.

 POLLOCK AND MULLA: THE INDIAN CNOTRACT AND

SPECIFIC RELIEF ACTS, 15TH EDITION, 2017, LEXIS
NEXIS PUBLICATION.
This book is better book which provides a lot on information on the
Specific Relief Act, 1963. It served me with the plenty of material that
helped me to complete my project. Each section in the book is aptly
supported by Case laws, including British and Indian case laws.

CONCLUSION
There are many contracts which are valid, but due to some certain
reasons or circumstances, the contracts are not enforceable before the
law and hence they become void. Examples of the reasons which lead to
the void agreements are – illegal contracts, contracts that have no lawful
consideration written or promised, contracts that restrict the other party
from doing the legal proceedings are void contracts in nature. As these
contracts are void and it is not possible to execute that contract further in
the court of law.

Similarly, voidable contracts are first enforceable before the law but they
later on are not valid because of some certain reasons.

The contract was made with power and influence and it was against the
will of that person but he was made to enter into a contract forcefully.

The contracts of a minor are considered as voidable, even if they don’t

fulfil the requirements as per the contract they cannot be held liable and
they can cancel the contract anytime.

Some smartphone apps, can be downloaded free of cost but later they
have in app purchases which cost real currency. These apps are majorly
targeting towards the children. They accept the terms and conditions of
those games. Later these types of activity lead to the lawsuit against the
company and it was suggested that those transactions were a part of
voidable contracts.