Chapter 4

VOID AND VOIDABLE AGREEMENTS

An agreement which does not satisfy the essential elements of a contract may be either void or voidable. The
definitions of these terms are given below.

1. Void Agreement

An agreement not enforceable by taw is said to be void.Sec: 2(g).

A void agreement has no legal effect. It confers no rights on any person and creates no obligations.

Examples of Void Agreement:

An agreement made by a minor; agreements without ; certain agreements against public policy ; etc..These
agreements are void ab into, i.e.., void from the beginning
,

Agreements which become void :

An agreement, which was legal and enforceable when it was` entered.. into, may subsequently become-void
due to impossibility of performance, change of taw or other reasons. When it becomes void the agreement
ceases to have Legal effect.
There are certain agreements which are expressly declared to be void even though they may otherwise
satisfy Sec.10 of the ,Indian contract Act. (i.e. would have been otherwise enforceable contracts).
They are as follows ,
1.
Section 26 of the Contract Act provides that every agreement in restraint of the. marriage of any.
person, other than a; minor is void.
2.
Section 27 of the Act states that every agreement -by which anyone- is restrained from exercising a
lawful profession, trade or business of any kind, is to that extent void.
3.
According to Section 28 of the Act Private individuals cannot y agreement g1ter orvary their
personal law or the Statute law.
4.
section 29 implies that, agreements, the meaning of which is not certain, or capable of ,being made
certain are void.
5.
Section; 30 of the Contract Act clearly states that agreements by way of wages are void.
6.
Section S6(1) provides that agreements to do an act Impossible in itself are void.
7.
section 24, 57 and 58 -maintain that agreements whose objects or considerations are unlawful are
void.
-

2. Voidable Agreement

A voidable agreement is one which can be avoided, i.e., set aside by some of the parties to it.
Until it is avoided, it is a good contract. An agreement which is enforceable by taw at the option of
one or more of the parties thereto, but not at the option of the other or .others, is a voidable contract.

Examples of voidable contracts:

A Contract brought about by coercion, undue influence, misrepresentation etc.

X coerces Y into entering into a contract for the sale of Ys house to .X This contract can be avoided

by Y. X cannot enforce the contract. But Y, if he so desires, can enforce it against X.

Unenforceable Agreement :
The term Unenforceable Agreement is used in English law.
It means an agreement which cannot be enforced in a court of law, one or both of the parties, because of
some technical defect, e.g., want of registration or non-payment of the requisite stamp duty.

Illegal Agreement
An Illegal Agreement is one which is against a la* m force in India.
Example : an agreement to commit murder, robbery or cheating
-

Distinction between it Void Agreement and aim Illegal Agreement

An illegal agreement is also void. But ~a void agreement is not necessarily illegal. An agreement

may not be contrary, to taw but may still be void. An: agreement, the terms of which are uncertain, is
void but such a contract is not illegal.
When an agreement is illegal, other agreements which are incidental or collateral to it are void. The

reason, underlying this rule is that the courts will not enforce any agreement entered into with the
object of assisting or. promoting an illegal trans- action.
If the main agreement is void, (but not illegal) agreements which are incidental or collateral to it may
.

be valid.
Examples:
(i) P engages B to kill C and borrows Rs. 100 from D to pry 8. Here the agreement with B is illegal. The
agreement with D is collateral to it, if D is aware of the purpose of the loan. In this case the loan transaction is
void and D cannot recover the money. But if D is not aware of the purpose of the loan, it may be argued that the
loan transaction is not collateral to the other illegal agreement and is valid.
(ii) W enters into a wagering agreement and borrows Its. 100 for the purpose. The main agreement is void
but the loan transaction being merely collateral to it is valid even though the creditor is aware of the purpose
of the loan.

Valid Contract
An agreement which satisfies ail the essential elements of a contract, and which is enforceable through the
courts is called v a l i d contract.
.