When it comes to legal agreements, it is important to understand the concepts of void and voidable agreements. While these terms may seem similar, they have significant differences that can impact the enforceability of the agreement. In this article, we will explore the differences between void and voidable agreements and what they mean in the context of legal contracts.
What is a Void Agreement?
A void agreement is a contract that is not legally enforceable. This means that if one party breaches the terms of the agreement, the other party cannot take any legal action to enforce the agreement. Void agreements are typically invalid from the beginning because they involve illegal activities or are against public policy. Examples of void agreements include contracts that involve:
– Fraudulent activities
– Illegal activities
– Immoral activities
– Competing with public policy
– Agreements with minors or mentally incapacitated individuals
In the case of a void agreement, both parties are released from their obligations under the contract. The contract is considered invalid from the beginning, and it has no legal effect.
What is a Voidable Agreement?
A voidable agreement, on the other hand, is a contract that is initially valid but can be voided by one of the parties. This means that one party has the option to either enforce the agreement or void it. In most cases, voidable agreements arise when one party has been coerced, misled, or tricked into signing the contract. Examples of voidable agreements include contracts that involve:
– Misrepresentation
– Undue influence
– Fraud
– Mistake
– Duress
In the case of voidable agreements, the party that has been coerced or misled has the option to void the agreement. They can choose to either rescind the contract or continue with the agreement. If they decide to rescind the agreement, both parties are released from their obligations under the contract.
Key Differences Between Void and Voidable Agreements
The key differences between void and voidable agreements are as follows:
– A void agreement is invalid from the beginning, while a voidable agreement is initially valid but can be voided by one of the parties.
– Both parties are released from their obligations under a void agreement, while only one party has the option to void a voidable agreement.
– Void agreements are illegal or against public policy, while voidable agreements arise due to coercion, fraud, or mistake.
Conclusion
Understanding the differences between void and voidable agreements is crucial when entering into legal contracts. Void agreements are not legally enforceable, while voidable agreements are initially valid but can be voided by one party. If you are unsure about the validity of an agreement, it is recommended that you seek the advice of a legal professional to avoid any legal repercussions in the future.