What is a void contract?

If you are entering into any kind of contract, you need to fully understand every detail related to it. This includes knowing the different types of contracts so that you are armed well when you take the legal route.

 

What is a void contract?

Contracts that do not have legal angle, making them weak and unacceptable in courts are void contracts. They cannot be enforced. A void contract is mentioned as unenforceable under Section 2(g) of the Indian Contract Act.

 

When does a contract become void?

• If both the parties have not mutually agreed on the terms and conditions, it is a void contract.
• Terms and conditions are vague.
• Absence of consideration — the amount paid by a party who accepts the offer mentioned in the contract offered to the other party.
• If the parties entering the contract are incompetent in front of law.
• Disagreement on facts mentioned in the contract between the two parties.

 

What are the types of void contracts?

• Voidable: These are valid contracts that can be cancelled by either of the parties. The most common reason for this contract is either a mistake in it or a misunderstanding between the parties involved.
• Ab initio: These contracts exist in case of frauds.
• Unenforceable: These have terms and conditions that cannot be enforced in courts.

See also: All about unilateral contract

 

How can you avoid void contracts?

• Draft the contract by following all legal rules. Also, ensure that the contract doesn’t oppose any public policy.
• Set the terms and conditions clearly so that they are not opposed by either of the parties. You can take professional help in drafting the contract so that there is no risk involved in it.
• Any illegal activity would immediately make the contract null and void.

 

FAQs

What is a void contract?

A contract that cannot be enforced in the court of law is a void contract.

What are the reasons for a void contract?

Illegal activities, disagreement between the two parties, mutual mistakes, etc., are a few reasons for a void contract.

Can a void contract be made valid?

No, a void contract cannot be made valid.

How does incapacity make the contract void?

If people who are incapable enter into an agreement, such as minors, or people with no sound mind, then the contract is void.

How does a contract that violates public policy become void?

Contracts that defy public policy or immoral in nature are void contracts.

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com