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What Is Meant By Void And Voidable Agreement? What Is Meant By Void And Voidable Agreement?

Bronze medal Reporter Names Posted 17 Oct 2020
What Is Meant By Void And Voidable Agreement?

As per the Indian Contract Act, an agreement is :

 “2.                                   

(e) Every promise and every set of promises, forming the consideration for each other, is an agreement;”

So when a person makes a promise, it is an offer by the person which when accepted by the other resulting in an agreement. When an agreement is enforceable by law, it is a contract. So a contract is a valid agreement but the same cannot be said vice versa since not every agreement is not a valid contract. So, an agreement should also have the following essential elements:

  • For this, first, the person has to make an offer – The initial step is when the person offers;
  • Once an offer is made, then another person has to accept it ;
  • Lawful object, that is the legality of the object is also important;
  • Then comes, lawful consideration ;
  • In addition to the above, the capacity to contract is also an important element.

Also, free consent of the parties to the agreement is as important as above. Agreements are in both written form as well as oral.

What Is A Void Agreement?

In the Act, 1872, it says that :

2.

(g) An agreement not enforceable by law is said to be void;”

So such agreements which cannot be enforced by law are void contracts and it means that a contract that cannot be enforced either of the parties. Contracts become void when the agreement is related to any unlawful or impossible acts which are against law and so cannot be enforced. Also, agreements become void when the object and consideration is unlawful.

A void contract is not a valid one from the beginning itself and so the performance of the contract is not possible. It does not exist and cannot be enforced by law.

What Is A Voidable Agreement?

Voidable contract as per the Act :

2.

(i) 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;”

Voidable agreements are those agreements that are made without free consent, due to any undue influence on any party to the agreement. Also, when a party prevents the other party from fulfilling or performing as per the promise or when a party fails to perform at the specified time period, then the contract becomes voidable.

A voidable contract becomes invalid due to any specific lawful reasons and when one of the parties to a contract does not consider it valid. This contract exists and is valid until it is considered invalid by one of the contracting parties.

In Muhammad Khalilur Rahman Khan vs Mohammad Muzammilullah Khan, the Allahabad High Court noted:

5. Section 24, Contract Act, enacts a similar rule. It lays down that if any part of a single consideration for one or more objects, or any one or any part of any one of the several considerations for a single object is unlawful, the agreement is void. In Mulla and Pollock's Commentary on the Indian Contract Act it is said that it is well settled that if several distinct promises are made for one and the same lawful consideration, and one or more of them be such as the law will not enforce, that will not of itself prevent the rest from being enforced.” Lawyers in India can provide further details in this matter.

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