Void vs Voidable Contracts Confusing? Here’s the Difference

Always seek legal advice before voiding a contract under these provisions. To help you understand validity, we’ll compare the following terms — viable, void, and voidable. If you can’t fulfill the end of your contract for any reason, you should contact the other party or parties involved and let them know your reasons. Sometimes, the court may allow parts of the contract to be rewritten instead of voided. For example, in a case involving a breach of contract, the non-defaulting party often must choose between a remedy at law and an equitable remedy.

Difference Between Void and Voidable

Specific performance is often used in real estate cases, where damages would not adequately remedy the breach. This remedy orders the party concerned to perform specific contractual obligations. With affordable credit-based pricing, Docupilot is suitable for businesses of all sizes. When you sign up, you get full access to all features, regardless of the pricing plan you choose. If you’re uncertain, consult a legal professional or leverage platforms like Enty, which offer expert AI contract review or even legal specialists services.

What happens when a contract is voidable?

However, if the innocent party affirms the contract after discovering the grounds for voidability, it becomes binding and enforceable. Contrastingly, imagine becoming entangled in a deceptive business offer—a contract arising from misinformation smells of a voidable agreement. The deceived party can choose to void the contract upon discovering misrepresentation, just as a film’s hero may shun partnership with an imposter. The reasons a contract becomes void are typically structural or fundamental. A lack of consideration, illegal subject matter, or impossibility of performance are common causes.

A void contract is invalid from the very beginning because it regards an illegal act, including a lack of any of the above elements. Conversely, a voidable contract becomes invalid when one party cancels it for legal reasons. This is because these individuals are unable to fully understand the terms and implications of the contract, rendering their consent invalid. Neither party to a void contract can approach a court of law and obtain a judgment in their favor. This is because void contracts contravene laws and regulations, and authorities tasked with implementing and upholding the law will not endorse or validate such contracts.

A void contract is a contract that is considered invalid from the beginning and has no legal effect. It lacks the essential elements required to create a legally binding agreement, such as legality or capacity. A void contract is essentially treated as if it never existed, and neither party can enforce its terms. On the other hand, a voidable contract is a valid contract that can be either affirmed or rejected by one or both parties involved. It is initially binding, but one or both parties have the option to void or cancel the contract due to certain legal reasons, such as fraud, duress, or misrepresentation. The party with the right to void the contract can choose to either enforce it or terminate it, depending on their decision.

• A void contract is essentially treated as if it never existed, and neither party can enforce its terms.
• Duress involves coercion or threats that force a party to enter into a contract against their will.
• A party can reject a contract if they discover a defect, such as fraud, after entering into the agreement.
• Typically, only the party who has been wronged or disadvantaged in the contract formation (e.g., due to fraud, misrepresentation, or duress) has the right to void a voidable contract.
• Such contracts are considered null and void – as if they never existed in the first place.

On the other hand, a voidable contract is also a legal contract which is declared invalid by one of the two parties, for certain legal reasons. A voidable contract remains valid and enforceable unless one of the parties decides to void it. If the contract is voided, the parties are no longer bound by its terms, and the wronged party may seek remedies such as rescission or damages. When dealing with void and voidable contracts, it’s essential to understand the legal remedies available to the parties involved.

Do I Need a Lawyer for Assistance With Void or Voidable Contracts?

When both parties agree that voiding the contract is the best course of action, they can do so through mutual consent. This can be achieved through a formal written agreement that outlines the termination of the contract. You should document the mutual agreement to void the contract to avoid any potential disputes in the future. In this article, we’ll clarify the difference between void and voidable contracts, telling you what you need to know before you sign anything. As a small business owner handling contracts, you may have come across the terms void vs voidable contract ‘void contract’ and ‘voidable contract’, but you may not know exactly what these mean. Sometimes people don’t realise that these terms are distinct and shouldn’t be used interchangeably.

What makes a contract voidable?

Some examples of contracts that are voidable are those that were entered under fraud, mistake, or duress or contracts entered into with minors or persons of unsound mind. Voidable contracts are legally binding on both parties until the innocent party seeks to rescind such contract. On the other hand, a voidable contract starts off as valid and enforceable. However, one party retains the right to either enforce or void it, depending on the circumstances.

Main Differences Between Void and Voidable Contracts

• A void contract, as the name suggests, is a contract that is unenforceable from the outset.
• Void contracts are akin to a promise from the protagonist in a horror film to “be right back”—empty and essentially meaningless.
• A void contract cannot be enforced by law and doesn’t give rise to any legal rights or obligations for either party involved.
• While the voidable nature may sound like a liability, these contracts can remain enforceable if the aggrieved party chooses to uphold them.
• In less severe cases, you can renegotiate terms to amend the agreement in your favor or remove all traces of illegality.
• Either participating party can amend, correct, or cancel the contract for valid legal reasons.

A void contract is illegal and unenforceable, while a voidable contract is legal and can be enforced. There is a lot more nuance to the differences between these types of contracts, and we will explore them in depth in this article. A void agreement is considered valid only at the time when it was created but later can be considered invalid. In contrast, the voidable contract is considered to remain active until one of the parties calls it off or the stipulated time of the validity of a contract ends. This article will highlight the key similarities and differences between void and voidable contracts and demonstrate how to use Docupilot to create valid and viable contracts.

Substantive vs Procedural Law: Difference and Comparison

In other cases, the other party may not agree to your proposal, and you will have to seek a court judgment in your favor. An example of a void real estate contract is an agreement by a seller who does not legally own the property. Such a contract is void because the seller lacks the legal authority to transfer ownership.

Void contracts are agreements that are not valid from the start and cannot be legally executed or enforced. Void contracts generally lack one or more of the necessary elements of a contract to make it legally binding. Certain contracts may be required to meet specific formalities, such as being in writing or signed by authorized parties, to be legally enforceable. When a contract is voidable, it remains valid until the party with the power to void it exercises their right to do so. If the contract is voided, the innocent party is typically entitled to be restored to their original position before entering into the contract.

In contrast, voidable contracts could be corrected and ratified through mutual agreement or terminated if either party chooses to void the agreement. A void contract is a null contract, meaning this contract isn’t enforceable from the start. This type of contract is considered invalid and has no legal force or binding power. A void contract cannot be enforced by law and doesn’t give rise to any legal rights or obligations for either party involved.

A voidable contract, on the other hand, is an agreement that appears to be valid but has a defect that gives one party the right to cancel or rescind the contract. For example, contracts signed under duress, misrepresentation, or fraud are voidable. A contract can also be voidable if one of the parties lacks the legal capacity to enter into a contract, such as a minor or someone who is mentally incapacitated. A void contract is a legal agreement that has no legal effect from the beginning and therefore cannot create any rights or obligations for the parties involved.

Use customizable templates and legally binding eSignatures within one system. With PandaDoc’s contract management solution, you can keep track of your contracts to make sure they are viable, valid, and enforceable. Moreover, the party aggrieved party has the right to claim damages from the other party. According to the old legal principle that ‘no man may profit from his own wrong,’ when a contract is rendered voidable, neither party can benefit at the expense of the other. Another example of an unbound party in a contract is someone who’s either under the influence or not mentally capable of entering into a contractual agreement. A mistake made by one or both parties regarding a material fact of the contract may render it voidable.