Contracts serve as the cornerstone of many interactions in our society and are necessary for legal and financial operations. But not every contract can be enforced in court. While some can be voidable, others are void. Although contracts can use any of these terms interchangeably, failing to understand the distinction between the two can have major legal ramifications.
void contract: About
- A contract that is void from the moment of its creation or that subsequently loses its validity is known as a void contract.
- The contract becomes ineffective if any of its fundamental components later become impractical. Furthermore, a contract loses its legal enforceability the moment it is declared void.
voidable contract: About
- When one of the parties to a contract has the right to enforce the terms of the agreement or reject them because they are not properly represented or respected, the contract is deemed voidable.
- This mostly implies that either one of the parties did not adequately respect the agreement or that the information in the contract was inaccurate. Until it is canceled or revoked, a voidable contract is regarded as legitimate and enforceable.
difference between void and voidable contract with example
The difference between void and voidable contract in tabular form are as follows:
| VOID CONTRACT | VOIDABLE CONTRACT |
| A contract that is not legally enforceable is known as a void contract. The contract is enforceable as of the date of formation because it satisfies all prerequisite requirements for becoming enforceable. | A contract that is only enforceable at the discretion of one of the two parties is considered voidable. |
| The Indian Contract Act of 1872 defines it under Section 2(j). | The Indian Contract Act of 1872 defines it in Section 2(i). |
| Due to the absence of necessary components for a legitimate contract, the agreement is void. | The contract is voidable since the party’s consent is not free. |
| Null and void agreements are null and void ab initio. | Voidable contracts are legally binding when they are made and remain so until the party that was wronged repudiates them. |
| No party may file a lawsuit for damages against another for non-performance; but any benefits that a party may have obtained must be reimbursed. | The party who feels wronged may file a lawsuit to recover damages. |
| It cannot, even after a fair amount of time has passed, constitute a legally binding agreement. | If the harmed party does not reject the agreement within a reasonable amount of time, it might become a legitimate contract once a reasonable amount of time has passed. |
| For example: X made a deal with Y whereby she would pay ₹20 for her laptop, which has a value of one lakh. Since Y is mentally incompetent, she gladly signs this contract. However, this contract is null and void because it cannot be made by someone who is not mentally sound, as per the Indian Contract Act. Consequently, this contract was null and void from the start. | For example: X and Y worked out an arrangement for X to pay ₹30,000 for the laptop. But when Y signed the agreement, she was still a minor. Because Y cannot communicate, this contract is voidable. Under the Indian Contract Act, an individual who is not a major or who has turned eighteen cannot enter into a contract. Consequently, the signed contract will be voidable. |
Key difference between void and voidable contract
- A void contract is from the moment of its creation intrinsically unenforceable. It is as if the deal never happened because it is devoid of the components that are necessary for a valid contract whereas a voidable contract, on the other hand, is initially enforceable and legitimate. If certain requirements are satisfied, one of the parties may, nevertheless, nullify or cancel it.
- A void contract was legitimate when it was made, but it subsequently loses its validity. In contrast, the voidable contract remains in effect as long as the party who feels wronged doesn’t withdraw it within the allotted time.
- An act loses its enforceability and becomes void when it is impossible for the parties to carry it out. The contract is voidable at the choice of the party whose consent is not free where there is non-free consent among the parties.
- Neither of the parties to an agreement may seek or claim damages in the event that the contract is void for non-performance. Conversely, in the event that a contract is voidable, any aggrieved party may pursue and recover damages for losses sustained as a result of the contract’s non-performance.
In general, it might be difficult to interpret void and voidable contracts at times. A contract that is voidable allows any party to change its terms, but a void contract is null and void. It’s important to know the main distinction between void and voidable contracts while making legal judgments.
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