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The main difference between a void agreement and a voidable contract is a void agreement is null from the start because a necessary component of the contract is missing, whereas a voidable contract is originally valid but may be revoked by the party that feels wrong.
A few more to keep in mind are:
1) A voidable contract can transfer rights to third parties before its repudiation and is enforceable until it is. In contrast, a void agreement cannot be enforced by any party or grant rights to third parties.
2) A void contract that is invalid may become enforceable if the wronged party abandons it within a fair amount of time, but a void agreement can never become enforceable.
Table of Contents
What is a Void Agreement?
According to section 2(g) of the Indian Contract Act, of 1872, an agreement is void if it is not enforceable by law, meaning that it cannot be contested in court. Such an agreement does not give the parties involved any rights because it has no legal ramifications. A void agreement cannot become a contract; it is void from the moment it is created.
An agreement must meet all of the requirements outlined in Section 10 of the Act to be enforceable. Therefore, an agreement is null and void if any one or more of its essential terms are violated at the time of its inception. Several agreements that are specifically deemed null and void include:
- Agreement with mentally ill parties, like a lunatic, alien enemy.
- An agreement with an illegal consideration or goal.
- The arrangement that forbids someone from getting married.
- An agreement in which there is a major error that affects both parties.
- The trade-restrictive agreement.
- Agreements for wagering, etc.
Example:
Assume that at a later time, Jimmy promises David (the minor) to give 1000 kg of wheat for Rs 20,000, but David fails to provide Jimmy with the promised amount of wheat. Since David is a minor and agreements with minors are void ab initio, Jimmy is now unable to sue David.
Also Read: What is the Difference Between Contract and Agreement? Complete Details
What is a Void Contract?
A “void contract” is no longer enforceable in court and is defined as such in Section 2(j) of the Indian Contract Act, of 1872. These kinds of contracts are void, and neither side may enforce them.
Void contracts are legally binding on the parties and are enforceable under Section 10 of the Act as long as they are entered into and meet all requirements before becoming invalid due to non-performance. These contracts lose their legal enforceability because of:
- Supervening impossibility
- Change of law
- Subsequent Illegality
- Repudiation of voidable contract
- Contingent contracts, etc.
Example:
Assume Nancy, a well-known dancer, signs a contract with Alpha Company to perform in a show. Regretfully, she had an accident a few days before the celebration that left her legs severely damaged, and the doctor prohibited her from dancing. In this situation, the contract is null and void.
Differences between a Void Agreement and a Void Contract
Although the terms void agreement and void contract are sometimes used interchangeably, it is crucial to recognise their differences. The terms “agreement” and “contract” have various meanings in legalese. Let us understand the difference between void agreement and void contract from the table below:
| BASIS FOR COMPARISON | VOID AGREEMENT | VOID CONTRACT |
| Meaning | An agreement that is legally void and has no legal ramifications is referred to as void agreement. | A void contract implies a valid contract, that ceases to be enforceable by law, and becomes a void contract when it lacks enforceability. |
| Void ab-initio | It is null from the very beginning. | It is initially valid but thereafter loses its validity. |
| Period of validity | It is never valid. | As long as it remains enforceable, it is legal. |
| Causes | Because one or more of the necessities is missing. | Due to impossibility of performance. |
| Prerequisites of contract | The agreement is null and void since none of its requirements were met at the time it was made. | All requirements for the contract are met at the time of entry, but for whatever reason, it later turns out to be null and void. |
| Restitution | Restitution is generally prohibited, but on an equitable basis, the court may allow it. | When the contract is found to be void, restitution is permitted. |
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FAQs
According to Section 2(j), a contract is null and unenforceable when it can no longer be enforced in court. In addition to this, Section 20 addresses contracts that are null and void if parties misunderstand the subject matter or key details.
Section 2(g) of the Act defines a void agreement. “An agreement not enforceable by law is said to be void,” the statement says.
When there is any change in law, supervening impossibility, subsequent illegality, etc. then the contract becomes void.
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