Wednesday, May 19, 2021

Void agreements and void contract

 Void agreements and void contract

Void agreements and void contract A void agreement is not enforceable by law since the time of its creation and is said to be void or null. This implies that it cannot be acted out and does not bind any single party nor can it be enforced forcefully by one party on another. According to section 2(g) of Indian Contract Act, 1872, these agreements do not confer any rights to either party and cannot be tested in the court. Thus a void agreement can never change into a binding contract.  


Void contracts are defined as contracts that are legally binding at the time of their creation but result in annulment later in time as mentioned in Section 2 (j) of the Indian Contract Act, 1872 .These contracts cannot be enforced after their annulment and normally there are no legal implications but there are some occasions where participants suffer legal consequences such as when a binding party is unable to perform and is liable according to law to suffer damages or pay compensation fees etc.

Void Agreement

A void agreement is defined under section 2(g) of Indian Contract Act, 1872, as an agreement which cannot be enforceable by law, i.e. such agreements cannot be challenged in the court of law. Void agreements and void contract Such an agreement lacks legal consequences, and so, it does not confer any rights to the parties concerned. A void agreement is void from the day, it is created and can never turn into the contract.

To become enforceable, an agreement must adhere to, all the essentials of a valid contract, described under section 10 of the act. Thus, in the case of non-compliance of any one or more, essentials of a contract, during its creation, the agreement becomes void. Some agreements which are expressly declared as void, include:

  • Agreement with incompetent parties, such as minor, lunatic, alien enemy.
  • Agreement whose consideration or object is unlawful.
  • The agreement which restricts a person from marrying.
  • An agreement where both parties are under the mistake of fact, material to the agreement.
  • The agreement which restricts trade.
  • Wagering agreements, etc.

Example: Suppose, Jimmy offers David (minor) to supply 1000 kg of wheat for Rs 20000, at a certain date in future, but B does not supply the stated quantity of wheat to Jimmy. Now, Jimmy cannot sue David, as David is a minor and an agreement with minor is void ab-initio.

Void Contract

Section 2 (j) of the Indian Contract Act, 1872 defines Void Contract as a contract that no longer remains a valid contract and cannot be enforced in the court of law. Such contracts do not have any legal effect and cannot be enforced by either party.

Void contracts are valid, when they are entered into, as they conform to all the conditions of enforceability, laid down under section 10 of the act and are binding on the parties, but later on becomes void because of impossibility to perform. Such contracts becomes unenforceable in the eyes of law due to:

  • Supervening impossibility
  • Change of law
  • Subsequent Illegality
  • Repudiation of voidable contract
  • Contingent contract etc.

Example: Suppose Nancy, a popular dancer contracts with Alpha Company, to dance in a show. Unfortunately, met an accident some days before the event, in which her legs injured badly and not allowed to dance by the doctor. In such a case, the contract becomes void.

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