Void vs voidable contracts: key differences and examples

Minors can enter contracts, but if they decide to breach the contract terms, no legal action can be taken against them. In business, you can’t take the risk of entering into unlawful (void) or defective (voidable) contracts. You need valid contracts that satisfy legal requirements, are mutually beneficial, and comply with necessary legal formalities. To better understand these concepts, let’s look at real-life examples of void and voidable contracts.

It’s advisable to seek legal counsel, especially if you are uncertain about the contract’s validity or the process for voiding it. Voidable contracts often arise due to issues like misrepresentation, undue influence, coercion, or a party’s void vs voidable contract incapacity to consent. A voidable contract, on the other hand, is a contract that appears valid on the surface but contains elements that make it susceptible to being canceled or voided.

Void contract and voiadable contract are quite commonly miscontrued, but they are different. Unlike a void contract, a voidable contract is considered to be valid and enforceable. However, it can be rejected by the party affected by the contract’s defects.

This guide will discuss what voidable contracts are, the circumstances that render them voidable, and some examples. Contracts can feel like uncharted territory, filled with potential pitfalls and buried treasures. Knowing the difference between void and voidable agreements is like having a detailed treasure map—guiding you through uncertain landscapes toward business success. With Enty by your side, you’ll not only avoid missteps but turn agreements into opportunities for growth. First, take a deep breath and assess—like Sherlock Holmes at a crime scene, gather intelligence before taking leaps. While the contract might look sound on paper, the subject matter—a time machine—is clearly impossible to deliver because it doesn’t exist (at least not yet).

1. Even after the passing of a spouse, the other spouse is obligated to continue making mortgage payments.
2. If you agree to buy a house, but then realize 6 months after purchase that there is an undisclosed problem the contract is voidable.
3. Companies must ensure that all contracts they enter into are legally valid and enforceable.
4. These common, easily completed contracts mostly go through without a problem.

Voidable Contract vs. Void Contract

For example, most legal contracts are not enforceable if the signatory has not reached the age of adulthood. Voidable Contract is the contract which can be enforceable only at the option of one of the two parties to the contract. In this type of contract, one party is legally authorized to make a decision to perform or not to perform his part. The right may arise because the consent of the concerned party is influenced by coercion, undue influence, fraud or misrepresentation, etc. Before entering into a contract, the parties must be aware of the types of contract, which may be helpful in understanding their rights and duties.

What Happens If I’ve Done My Part for a Contract Then Considered Void?

Void contracts can result in wasted time and resources, as the business cannot enforce the terms or seek legal remedies. Voidable contracts are legally enforceable until they are voided by one party. If a party chooses to void the contract, they are typically entitled to seek remedies. The remedies depend on the grounds for voiding the contract but may include rescission, restitution, or damages. Based on validity, there are several types of contract, i.e. valid contract, void contract, illegal contract, etc.

A contract may be ruled null and void should the terms require one or both parties to participate in an illegal act, or if one party becomes incapable of meeting the contract terms. Voidable contracts arise in many real-world situations where one party has been unfairly influenced or misled during the formation of the contract. 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. This happens when the contract fulfills all the necessary conditions of a valid contract when it’s formed. 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.

Specific Performance

So, take a read of this article, in which we have provided the fundamental differences between void contract and voidable contract. The appropriate options vary depending on the contract’s enforceability, the extent of the breach of contract, and many other factors. When we say a contract is void, it’s null and void and not backed by the force of law, meaning it’s unenforceable. A contract involving a minor is another example of what is typically a voidable agreement.

How Voidable Contracts Work

This lack of enforceability is absolute and applies to both parties involved. For example, if two businesses create a contract for an illegal activity, the law treats the agreement as though it never existed. On the surface, void contracts may seem like a legal dead-end, but their existence can actually be beneficial in certain scenarios.

She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. It can oblige a buyer to follow through with a purchase if they want to withdraw after the terms and conditions of the contract have already been signed.

If a party enters into a financial contract based on fraudulent statements or misrepresentations made by the other party, the deceived party can void the contract. Examples of contracts that may be valid after the death of a party include conditions of a decedent’s will and joint contracts. If you believe a contract you are part of is void or voidable, please contact the law offices of Aldrich Legal Services.