Void Agreement and Void Contract: Understanding the Differences
In the world of business, legal contracts are a ubiquitous aspect. Whether it’s a rental agreement, an employment contract, or the terms of service for an online platform, it’s important to ensure that all parties involved know exactly what they are agreeing to. However, not all agreements and contracts are created equal. Some may be considered void or voidable, which can have serious legal and financial implications. In this article, we’ll take a closer look at the differences between void agreements and void contracts.
What is a Void Agreement?
A void agreement is an agreement that is not legally enforceable. Such agreements are considered to be null from the very beginning and are not binding on any of the parties involved. The legal consequences of a void agreement are as if the agreement never existed in the first place. Void agreements can arise from various circumstances, such as:
– If the agreement is made under duress or coercion
– If the agreement is against the law or public policy
– If the agreement restricts a person’s freedom to marry
– If the agreement is impossible to perform
– If the agreement involves unlawful consideration
For example, if a person is forced to sign an agreement under the threat of physical harm, or if an agreement is made to carry out illegal activities, it will be considered void. Similarly, if a person agrees to an impossible task, such as flying to the moon or traveling through time, the agreement will be considered void.
What is a Voidable Contract?
A voidable contract, on the other hand, is a contract that is initially valid but can be legally voided by one or more parties. If a contract is voidable, it can be challenged and declared null and void but only by one of the parties involved. The party who has the right to void the contract may choose to do so for various reasons, such as:
– If the contract was entered into through fraud, misrepresentation, or mistake
– If the party was coerced or under undue influence while entering into the contract
– If the party was unable to give their consent freely due to mental incapacity or intoxication
– If the contract is illegal or against public policy
For example, if a person is tricked into signing a contract that they believed to be something else or if a person signed a contract while under the influence of drugs or alcohol, the contract may be voided by the affected party. Similarly, if a contract involves illegal activities or violates public policy, it may be voided by one of the parties.
Key Differences between Void Agreement and Void Contract
The main difference between a void agreement and a voidable contract lies in their initial legal status. A void agreement is deemed null and void from the start, while a voidable contract is initially valid but can be voided later by one of the parties involved. Another key difference is the reason for voiding the agreement or contract. A void agreement cannot be enforced due to the inherent defects in the agreement, while a voidable contract can be voided due to the parties’ behavior or other external factors.
In conclusion, it’s important to understand the differences between void agreements and voidable contracts. A void agreement is not legally enforceable and is considered null and void from the start, while a voidable contract is initially valid but can be voided later by one of the parties involved. Knowing what constitutes a void agreement or a voidable contract can help individuals protect their interests and avoid potential legal complications down the road.