RAJIV GANDHI NATIONAL UNIVERSITY OF LAW

PATIALA , PUNJAB

Law of contracts

Difference between void , valid and voidable

contract
SUBMITTED TO :- SUBMITTED BY :-
Dr Sangeeta Taak (assistant Utkarsh Jindal
Professor of law ) (19008)
Group no :-2
 Acknowledgement
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throughout the duration of project. Her suggestions were of monumental help in the rough work of our
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This
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friends between
for their void , voidable
constant andand
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submitted
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the research National University of Law, Patiala in partial fulfilment of the
requirement of the B.A. LLB (Hons.) course. It is an original and bona-fide research work
carried under my supervision and guidance. No part of this project has been submitted to
any University for the award of any Degree or Diploma, whatsoever. 

Dr. Sangeeta Taak Date:

(Assistant Professor of Law)
Introduction :-
Contract is agreements between the parties enforceable by law of contracts . The Contracts or
agreements between various parties are framed and validated by the Indian Contract Act. The
Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement
enforceable by law”. In other words, we can say that a contract is anything that is an agreement
and enforceable by the law of the land. This definition has two major elements in it viz –
“agreement” and “enforceable by law”. So in order to understand a contract in the light of The
Indian Contract Act, 1872 we need to define and explain these two pivots in the definition of a
contract.

Agreement

The Indian Contract Act, 1872 defines what we mean by “Agreement”. In its section 2 (e), the
Act defines the term agreement as “every promise and every set of promises, forming the
consideration for each other”. Now that we know how the Act defines the term “agreement”,
there may be some ambiguity in the definition of the term promise.

Promise :-This ambiguity is removed by the Act itself in its section 2(b) which defines the term
“promise” here as: “when the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted. Proposal when accepted, becomes a promise”.

In other words, an agreement is an accepted promise, accepted by all the parties involved in
the agreement or affected by it. This definition thus introduces a flow chart or a sequence of
steps that need to be triggered in order to establish or draft a contract.

Contract = Accepted Proposal (Agreement) + Enforceable by law (defined within the law)

A contract is an accepted proposal (agreement) that is fully understood by the law and is legally
defined or enforceable by the law. So a contract is a legal document that bestows upon the
parties special rights (defined by the contract itself) and also obligations which are introduced,
defined and agreed upon by all the parties of the contract.

Types of Contracts On The Basis Of Validity

Chapter 2 of the Indian Contract Act, 1872 discusses the voidable contracts and void
agreements.

Valid contract :-
A valid contract is a written or expressed agreement between two parties to provide a product
or service. There are essentially six elements of a contract that make it a legal and binding
document. In order for a contract to be enforceable, it must contain:

An offer that specifically details exactly what will be provided

Acceptance, or the agreement by the other party to the offer presented

Consideration, or the money or something of interest being exchanged between the parties

Capacity of the parties in terms of age and mental ability

Intent of both parties to carry out their promise

Object of a contract is legal and not against public policy or in violation of law

In other words, a contract is enforceable when both parties agree to something, back the
promise up with money or something of value, both are in sound mind and intend to carry out
their promise and what they promise to do is within the law.

So, if Dennis offers to sell a puppy to Jean for the sum of $500 and Jean delivers the cash for the
canine, providing Jean and Dennis are of age, the dog is rightfully Dennis' to sell and there is
nothing illegal about the transaction, the parties have a valid contract. There are contracts that
do not contain all of the elements, and for those contracts, the courts make the determination
as to whether the contract can be enforced.

According to the Contract Act, 1872, the requirements for a valid contract are the Agreement
and Enforceability:

Agreement
The first recruitment of a valid contract is an agreement. Every promise and all set of promises,
forming the consideration for each other is an agreement. When a person to whom the
proposal is made defines his assent, the proposal is said to be accepted. A proposal, when
accepted, becomes a promise.

An agreement is valid when one party makes a proposal or offer to other party signifies his
assent. The following are required for a valid agreement. The agreement must be between two
persons. It is required to be between an offeror and an of free, who accepts the o0ffers
becomes an acceptor. Both these parties should be different persons, as one cannot enter into
an agreement with himself. Both the offeror and offeree in the same sense and at the same
time should understand the agreement.

Enforceability
An agreement to mature into a contract must create legal obligation as per the provision of
contract laws that is a duty enforceable by law. Any agreement which does not create any
enforceability, i.e. where the parties do not have a right to approach the court of law to avail
legal remedy for breach of contract will not be a contract.

Essentials of a Valid Contract

A brief on all essentials of a valid contract is as follows:

Offer and Acceptance

All offers must be valid and once accepted, it binds both the parties into a valid agreement. The
offree is now an acceptor, and thus the agreement is made between an offeror and an
acceptor. The adjective lawful suggests that the offer and acceptance must satisfy the
recruitments of the contract act in relation.

Legal relationship

Parties to a contract must desire to constitute a legal relationship. It results when the parties
know that if any one of them fails to fulfil his/her part of the promise, he/she would be liable
for the failure of the contract. If there is no desire to create a legal relationship, there is no
contract between the parties. Agreements of social or domestic natures, which do not
contemplate a legal relationship, are not contracts.

Lawful consideration

Consideration is described as something in return. It is also vital for the validity of the contract.
A promise to do something or to provide something without anything in return will not be
enforceable at law and, therefore, will not be valid. Consideration need not be in kind or cash. A
contract without consideration is a wagering contract or betting. Besides, the consideration
must also be lawful.

Competency of parties

The parties to an agreement should be capable of contracting. In other words, they should be
capable of entering into the contract. According to the Contract act, every person is competent
to contract who is the age of majority to which he/she is subject to and who is of the sound
mind and is not disqualified from the contracting by any law to which he/she is subject. Thus,
according to the contract act, every person with the exception of the following is competent to
enter into a contract:

A minor

A person of unsound mind

A person expressly declared disqualified to get into a contract under any Law

Free consent

Another essential of the valid contract is the consent of parties, which should be free. As per
the Contract Act, two or more parties are said to consent when they agree upon the same
things in the same sense. The consent is considered free when any of the following things do
not induce it:

Coercion

Misrepresentation

Fraud

Undue influence

Mistake

Lawful objects

According to Contract act, an agreement may become a valid-contract only, if it is for a lawful
consideration and lawful object. The below-mentioned considerations and objects are not
lawful as per the Contract Act

If it is forbidden by law

If it is against the provision of any other laws

If it is fraudulent

If it damages somebody’s person or property

If it is in the opinion of courts, immoral or against the public policies.

If an agreement is illegal, immoral or against public policy, such agreement becomes an invalid
valid contract.

Writing and Registration

The agreements may be oral or in writing. When the agreement is in writing it should comply
with all legal formalities as to attestation and registration. If the agreement does not abide by
the requisite legal formalities, the law cannot enforce it.

Certainty

To give rise to the valid contracts, the terms of the must not be vague or uncertain. Ascertaining
the meaning of the agreement for must be possible. Otherwise, it cannot be enforced.

Possibility of Performance

A valid contract must be capable of performing. An agreements to do an act impossible in itself

are void. If the act is impossible in itself, physically, practically or legally then the agreement is
not enforceable.

Not expressly declared void

The agreement must have been expressly declared to be void under the contract laws. This act
specifies certain types of agreement that have been expressly declared to be void. The
following agreements have been declared as void under the Contract Act.

An agreement in restraint of marriage

An agreement in restraint of trade

An agreement by way of wager

voidable contract
It is a formal agreement between two parties that may be rendered unenforceable for a
number of legal reasons. Reasons that can make a contract voidable include the following:

Failure by one or both parties to disclose a material fact

A mistake, misrepresentation or fraud

Undue influence or duress

One party's legal incapacity to enter a contract

One or more terms that are unconscionable

A breach of contract

A voidable contract is originally considered to be legal and enforceable but can be rejected by
one party if the contract is discovered to have defects. If a party with the power to reject the
contract chooses not to reject the contract despite the defect, the contract remains valid and
enforceable. Most often, only one of the parties is adversely affected by agreeing to a voidable
contract in which that party fails to recognize the misrepresentation or fraud made by the other
party.

These types of Contracts are defined in section 2(i) of the Act: “An agreement which is
enforceable by law 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.” This may seem difficult to wrap your head around
but consider the following example:

Suppose a person A agrees to pay a sum of Rs. 10,0000 to a person B for an antique chair. This
contract would be valid, the only problem is that person B is a minor and can’t legally enter a
contract. So this contract is a valid contract from the point of view of A and a “voidable”
contract from the point of view of B. As and when B becomes a major, he may or may not agree
to the terms. Thus this is a voidable contract. A voidable contract is a Valid Contract. In a
voidable contract, at least one of the parties has to be bound to the terms of the contract. For
example, person A in the above example.

The other party is not bound and may choose to repudiate or accept the terms of the contract.
If they so choose to repudiate the contract, the contract becomes void. Otherwise, a voidable
contract is a valid contract.

Voidable contract is :- One or both parties has not disclosed a material fact.

The contract includes misrepresentation, errors, or fraudulent statements.

The contract was signed under duress or undue influence.

One or both parties could not legally enter into a contract.

The contract contains one or more unconscionable terms.

Breach of contract occurs.

A contract with one or more of these issues can still be considered legally enforceable if both
parties decide to honor its terms anyway. The adversely affected party may fail to recognize the
existence of an issue with the contract but can opt to void the contract if such an issue is
discovered

The following circumstances can deem a contract voidable:

A party was forced or threatened to sign the contract.

A party was under undue influence.
A party was mentally incompetent, such as a minor or a person suffering from mental
illness.
A breach of contract occurred.
Mistakes were made by both parties. Note that this is different from simply not reading
a contract, which does not make a contract voidable.
A fraud was committed (withholding or falsifying information or having no intention to
deliver on the terms of the contract).
Facts were misrepresented.

Void contract :-
Void contract isdefined by Section 2(j) vi:., a contract which ceases to be enforceable
bylaw is a void contract since the time it ceases to be enforceable.

INTRODUCTION :-
All agreements may not be enforceable at law. Only those agreements which fulfillthe
essentials laid down in section 10 can be enforced. The Indian Contract Actspecifically
declares certain agreements to be void. According to section 2(g)
, an agreement not enforceable by law is void. Such an agreement does not give rise to
any legal consequences and is void ab initio
. Agreement by a Minor or a Person of Unsound Mind:A person who has not completed
his or her 18 years of age signifies as minor. Lawacts as the guardian of minors and
protects their rights, because their mentalfacilities are not mature- they do not possess
the capacity of judge what is goodand what is bad for them. Accordingly, where is a
minor charged with obligationsand the other contracting party seeks to enforce those
obligations against theminor, the agreement is deemed as void.A person who does not
possess a sound mind or whose mental powers are notarranged or whose mental
condition is not under his or her own control. Anyagreement by person of unsound
mind is absolutely void because he has nocapacity to judge, what is good and what is
bad for him.

Illustrations

(a) A, 15 years old boy, made an agreement with B to give him Tk.1000. This is a void
agreement.

(b) A mentally disordered man made an agreement with X to marry her, but this is not a
valid agreement.

greement Made Without Consideration: An agreement made withoutconsideration is

void, unless

I) It is expressed in writing and registered under the law for the time beingenforce for
the registration of (documents), and is made on account ofnatural love and affection
between parties standing in a near relation toeach other; or unless.

II) It is a promise to compensate, wholly or in part, a person who has alreadyvoluntarily

done something for the promisor, or something which thepromissory was legally
compellable to do, or unless.

III) It is a promise, made in writing and signed by the person to be chargedtherewith, or

by his agent generally or specially authorized in the behalf, topay wholly or in part a
debt of which the creditor might have enforcedpayment but for the law for the
limitation of suits.

7
Illustrations

a) A promises for no consideration, to give to B Tk.1000; this is a voidagreement.

b) A, for natural, love and affection, promises to give his son, B Tk.1000. Aputs his
promise to B into writing and registers it. This is a contract.

c) A finds be B’s purse and gives it to him. B promises to give A Tk.50. This isa contract.
d) A supports B’s infant son. B promises to pay A’s expenses in so doing. Thisis a
contract.
Agreements in Restraint of Marriage: Every individual enjoy the freedom tomarry and so
according to
section 26
of the contract act “every agreement isrestraint of the marriage of any person, other
than a minor, is void.” The restraintmay be general or partial but the agreement is void,
and therefore, an agreementagreeing not to marry at all, or a certain person or, a class
of persons, or for a fixedperiod, is void. However, an agreement restraint of the
marriage of a minor is validunder the section. This section enact that agreement in
restraint of the marriage ofany person, other than a minor is void. In the interest of the
society, contracts formarriage are scrutinized with a close and vigilant suspicion of
undue influence,fraud or imposition. So the law—

(I) Prevents improvident, ill-advised, and often fraudulent matches;

(II) Avoid all such contracts as tend to the deceit and injury, or encourageartifices and
improper attempts to control the exercise of free judgment;

(III) Discountenances secret contracts made with prevents and guardians,whereby on a

marriage, they to receive a benefits

(IV) Renders invalid certain agreements in restraint of marriage.

9
D
IFFERENCES
B
ETWEEN
V
OID
A
GREEMENT &
V
OIDABLE
C
ONTRACT
Contract law is complex and can be confusing. Void agreements orcontracts and
voidable contracts are similar enough in name to be almostindistinguishable, but legally
significant differences exist between the two.Related Searches …..

Void Agreements or Contracts


A void agreement, or void contract, is a contract that is not truly a contract. Itmay have
been made under duress as an agreement to commit an illegalaction or as a contract to
perform an impossible duty.

Voidable Contract


Voidable contracts are contracts that are legally valid agreements betweentwo parties;
however, they can be voided or nullified by one of the parties.Voidable contracts most
frequently involve contracts made with minors, whoare not bound to fulfill the contract
in most states.

Legal Differences


A void contract is a nonexistent and illegal contract that cannot be upheld bylaw;
neither party is bound to complete the contract and can be prosecutedif any completed
actions are illegal. Voidable contracts are legal and bindingto at least one party, which
must fulfill his portion of the contract.

Significance


Void contracts may be a cause for lawsuits or jail time depending on thecontext of the
agreement and whether or not action was taken. Voidablecontracts can be detrimental
to the bound party unless the contract isnullified by the individual who is not bound by
the contract.

Considerations


 Knowing the basics of contract law can help an individual recognize asituation where a
contract may be void or voidable. Understand thedifference between those types of
contracts before engaging in legalagreements.

Conclusion :-

To conclude, contract law is a complex type of law which is divided in many parts to make sure
it little bit simple. 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. By the conclusion it can be said that
agreement is the essential part of a contract.According to sec 2(g) of the Contract Act 1872, an
agreement not enforceable bylaw is void. Such an agreement does not give rise to any legal
consequences andis void ab initio From section 11 to 56 of the Contract Act 1872 there
mentionedvarious agreements which are void in nature. Though it looks similar, but there
issome differences between void agreement and voidable contract.

REFERENCES

Black’s Law Dictionary

Business Dictionary

The Difference between a Void Agreement & a Voidable Contract:by Bailey Shoemaker
Richards

Wikipedia

Law of Contract

 Avtar Singh, Contract and Specific Relief. 10th Ed. Allahabad, Eastern Book Company, 2010.

Bangia, R.K., Indian Contract Act. 11th Ed. Faridabad, Allahabad Law Agency, 2009
Indian Contract Act,1872

Websites:-

https://www.britannica.com/

https://www.upcounsel.com/

www.Legalservicesindia.com