DIFFERENCE BETWEEN VOID CONTRACT AND VOIDABLE CONTRACT

By Surbhi S., Key Differences  .

When an agreement is enforceable at law, it becomes a contract. Based on validity, there are several types of contract, i.e. valid contract, void contract, illegal contract, etc. Void contract and voiadable contract are quite commonly miscontrued, but they are different. Void Contract, implies a contract which lacks enforceability by law, whereas Voidable Contract, alludes to a contract wherein one party has the right to enforce or rescind the contract, i.e. the party has to right to put the contract to end.

Before entering into a contract, the parties must be aware of the types of contract, which may be helpful in understanding their rights and duties. So, take a read of this article, in which we have provided the fundamental differences between void contract and voidable contract.

Definition of Void Contract

A void contract is a contract which is 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 a 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 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.

Definition of Voidable Contract

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 a 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 the concerned party is influenced by coercion, undue influence, fraud or misrepresentation, etc.

The contract becomes valid until the aggrieved party does not cancel it. Moreover, the party aggrieved party has the right to claim damages from the other party.

Key Differences Between Void Contract and Voidable Contract

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 the 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, the voidable contract is valid until the aggrieved party does not revoke 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.

Examples

  • 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 the 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.

Conclusion

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, many people 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.

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