What is the difference between void contract and voidable contract?

In India, the law which governs the field of agreements and contracts is the Indian Contract Act, 1872. Among the numerous aspects of legality which surrounds a contract, the Indian Contract Act also codifies the law relating to the enforceability and validity of agreements and classifies them on this basis into the following categories:

1. Valid Contract

2. Void Contract

3. Voidable Contract

4. Illegal Contract

The Indian Contract Act lays down all the essential ingredients which make a contract valid and enforceable in law and an agreement which has all these essential elements is termed as a valid contract. These essential elements are:

1. The agreement must be made for some valid consideration

2. The agreement must be between persons who are competent to contract under law

3. The agreement is entered into with the free will of the parties

4. The agreement must be in furtherance of a lawful object

While a valid contract is recognised by and enforceable in law, void and voidable contracts on the other hand lack the essential elements detailed above, which make an agreement a legally enforceable contract under the Indian Contract Act.
 

Void Agreements

Void agreements are defined under Section 2 (g) of the Indian Contract Act as those agreements, which are not enforceable by law. Thus, a void agreement fails to bind its signatories to the terms mentioned therein and in essence is a meaningless document in the eyes of law with no legal force. The Indian Contract Act specifically enlists the following agreements which are considered void in law:

1. Agreements where both parties are under some mistake as to a matter of fact. For example, an agreement for the sale of a horse which was dead at the time of making such agreement, though neither party was aware of such fact, would be void (Section 20).

2. Agreements where a part of the consideration and/or object is unlawful (Section 24). As per the Indian Contract Act, the consideration and/or object of an agreement is said to be lawful, unless:

• it is either forbidden by law; or

• defeats the provisions of any law; or

• would result in injury to the person or property of another; or

• is regarded as immoral by the courts; or

• is opposed to public policy

3.    Agreements which are made without any consideration (Section 25)
4.    Agreements in restraint of marriage (Section26)
5.    Agreements in restraint of trade (Section27)
6.    Agreements in restraint of legal proceedings (Section28)
7.    Agreements, the meaning of which is uncertain (Section 29)
8.    Agreements by way of wager (Section 30)
9.    Agreements to do an impossible act (Section 56)
 

Voidable Agreements

Voidable agreements are defined under Section 2 (i) of the Indian Contract Act as those agreements which are only enforceable at the option of one or more of the parties to such agreement and not at the option of others.

An agreement under the Indian Contract Act is considered voidable if the consent of one of the parties is obtained by way of fraud, coercion or misrepresentation. In such a situation, the party whose consent was obtained by such unlawful means can either choose to revoke the agreement and make it unenforceable or go ahead with its performance as per his wishes. Thus, such an agreement is voidable at the option of such party.
 

Difference between Void and Voidable Agreements

The primary difference between void and voidable agreements is the fact that void agreements are invalid and incapable of being enforced by either party, whereas voidable agreements can be enforced at the option of some of its parties.

A void agreement is invalid by its very nature, whereas a voidable agreement becomes invalid at the option of a party. Therefore, as opposed to void agreements, voidable agreements are binding on at least one of the parties to such contract. Thus, a voidable agreement can be enforced by one of the parties to a contract in a court of law, unless revoked within stipulated time.