When it comes to contract law, distinguishing between void and voidable agreements is crucial. A void agreement is considered invalid from the beginning, whereas a voidable agreement can be declared void but remains enforceable until it is declared so. So, what exactly distinguishes a void agreement from a voidable one?
There are several scenarios that can result in a void agreement. Firstly, if the agreement is based on an illegal or immoral act, it is considered void. For example, if the agreement is to sell illegal drugs or hire someone for illegal activities, it will be considered void. Similarly, an agreement that is against public policy, such as a contract that restricts an individual`s freedom of speech or religion, will also be void.
Another scenario that can result in a void agreement is if one of the parties is not legally capable of entering into the agreement. For instance, if one of the parties is a minor or lacks mental capacity, the agreement will be void. This is because the person is not legally capable of understanding the terms and conditions of the contract.
Furthermore, fraud or misrepresentation can also render an agreement void. If one of the parties intentionally misrepresents or conceals important information, the agreement will be considered void. For example, if a seller misrepresents the quality or condition of a product, the buyer can declare the agreement void.
On the other hand, a voidable agreement is one that can be declared void by one or both parties involved. The reasons that can render an agreement voidable typically include undue influence, coercion, or mistake. Undue influence is when one of the parties uses their power to influence the other party to enter into an agreement that is not in their interest. Coercion, on the other hand, is when one of the parties forces the other party to enter into an agreement against their will. Lastly, a mistake is when one of the parties misunderstands the terms of the agreement.
In conclusion, a void agreement is one that is considered invalid from the beginning and cannot be enforced. It can result from an illegal or immoral act, a lack of legal capacity, or fraud and misrepresentation. A voidable agreement, on the other hand, can be declared void by one of the parties and typically arises from undue influence, coercion, or a mistake. As a result, it is essential to understand these distinctions to protect your rights and interests in any contractual agreement.