Compare the void agreement and a void contract

FinanceFinance ManagementBanking & Finance

To record commitments between the companies or between the parties, contracts and agreements plays an important role. These agreements or contracts also play a role in the companies’ smooth functioning.

Void agreement

In simple words, it is not enforced by law which means that the parties which are involved in agreements have no rights and can’t be challenged in courts.

These agreements can’t be changed into binding agreements. To become void agreement, it must meet the essentials which are mentioned in section 10 of the act.

Some of the agreements which are declared as void are as follows −

  • Agreements with minors, lunatics etc.
  • Agreements whose consideration is unlawful.
  • If a person is restricted by marriage.
  • An agreement which restricts trade etc.

Example

An agreement is made between supplier and customer for the supply of goods at a future date and the amount is paid. The supplier fails to supply the goods to customers and the supplier is minor. If the supplier can’t supply the required number of goods then the customer can’t sue the supplier because the supplier is minor.

Void contract

In simple words, void contracts are those contracts which can’t be enforced by law and don’t have any legal effects.

In some special conditions like when a binding party can’t perform and is liable to law (damages, compensations etc.) they suffer legal consequences. They become valid when they meet essentials in section 10.

The reasons for the unenforceable are contingent contract, subsequent illegality etc.

Example

If a dancer has made a contract with a company to participate in a dance show, and before the show, he meets with an accident. Moreover, due to his medical conditions, the doctor does not allow him to dance. Then, the contract becomes void.

Difference

The major differences between a void agreement and a void contract are as follows −

  • Void agreement is never valid and the void contract is valid till the contract is not cease to be enforceable.
  • Void agreement is void from the beginning and the void contract is valid at the beginning, but becomes void later.
  • In void agreement, the restitution is not allowed whereas, in the void contract, the restitution is allowed when the contract becomes void.
raja
Published on 05-Jul-2021 12:06:48
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