The difference between void and voidable contract decides whether an agreement creates enforceable rights and what remedies parties can claim. A void contract is invalid from inception and never enforceable. A voidable contract remains valid unless the aggrieved party rescinds it due to vitiated consent such as coercion, fraud, misrepresentation or undue influence. This guide explains meanings, key features, and the difference between void and voidable contract with examples, a side-by-side comparison table, and Indian law references to help students and professionals apply the rules confidently.
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What is a Void Contract?
A void contract is one that is not enforceable legally in the very first stage of the contract. Such a contract has inadequate fundamentals of a valid contract. It lacks its legality, consideration, or mutual assent, and thus it becomes non-binding in nature. Void contracts are null and void from the very beginning of the contract. It has no legal implication, and neither party is liable for implementing the terms of such a contract.
Features of Void Contracts
Lack of Legality: A void contract often contravenes public policy or the parties involved will be doing something illegal as such a contract is void.
Lacks Legal Obligations: In the case of an unenforceable contract, neither party can legally enforce any obligations against the other.
Cannot Be Rectified: A void contract cannot be rectified or become binding by either of the parties' consent.
No Remedy: In case of a void contract, generally, the parties cannot claim any kind of remedy or compensation for the loss suffered by the failure of the contract.
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What is a Voidable Contract?
A voidable contract, though initially valid and enforceable, is one that later on can be declared void at the option of one of the parties. Such a contract may be made voidable by the party having such power to fulfill any condition, like fraud, misrepresentation, coercion, or undue influence. It remains valid and binding until the party exercises his right to void the contract.
Features of Voidable Contracts
Option to Void: A voidable contract is valid until the wronged party elects to void it.
Legal Obligation: The contract places legal obligations on parties as long as it has not been voided.
Enforceability: It is enforceable in courts unless the party with the right to void it exercises that option.
Compensation Available: If a voidable contract has been annulled because one party acted wrongly, the other party may claim compensation.
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Key Differences Between Void and Voidable Contracts
It is important to know about the distinction between these two types of contracts to determine the rights and obligations of the parties involved. For your convenience, the following are the key differences between void and voidable contracts:
1. Definition
Void Contract: A contract not capable by law and is void ab initio
Voidable Contract: A contract initially valid but can be made void at the option of a party to it
2. Enforceability
Void Contract: It is not enforceable in a court of law as it lacks the basic constituents of a valid contract.
Voidable Contract: The contract is enforceable unless the party to whom damages are awarded chooses to void the contract.
3. Legal Effect
Void Contract: The parties are not bound by its terms and it has no legal effect .
Voidable Contract: A contract is legally binding and fully effective until the party entitled to void it does so.
4. Creation
Void Contract: The essential elements like consent, legality, or consideration do not exist from the very beginning of a contract.
Voidable Contract: A voidable contract is valid at first but then becomes void. This can be because of false representations, coercion, fraud, etc.
5. Examples
Void Contract: A crime such as drug trafficking or a contract without consideration, like one party offering something and the other party offering nothing.
Voidable Contract: A contract executed under compulsion or where one party misrepresented facts, giving the aggrieved party the right to void the contract.
6. Parties Responsibilities
Void Contract: There exists no legal responsibility owed from a void contract. Neither party can enforce any obligations in place, nor is compensation given for damages incurred.
Voidable Contract: Legal obligations exist until the party with the right to void the contract exercises that option. If the contract is thus voided, the party who suffered losses can be entitled to claim compensation.
7. Remedies
Void Contract: No remedy could be claimed by either party since the law treats the contract as something that never existed.
Voidable Contract: The aggrieved party may have remedies such as compensation of damages, in particular on account of wrongful conduct attributable to the other party.
8. Possibility of Rectification
Void Contract: A void contract can never be rectified or made enforceable because it is inherently invalid.
Voidable Contract: The voidable contract can be remedied when the aggrieved party does not decide to annul and both parties agree to the fulfillment of the contract.
9. Character of the Contract
Void Contract: The contract is null and void from its very inception and has no legal existence.
Voidable Contract: The contract has a legal existence till the aggrieved party decides to annul.
10. Right to Rescind
Void Contract: No further step is required to rescind the void contract because a void contract remains ab initio.
Voidable Contract: A voidable contract can be rescinded or canceled if the wronged party was compelled, defrauded, or deceived by the other party.
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Void Contract vs. Voidable Contract: Key Highlights
The difference between void and voidable contract lies in their legal validity and enforceability. A void contract is invalid from inception and unenforceable. A voidable contract is valid until the aggrieved party rescinds it. See the table for key differences in validity, enforceability, parties’ rights and remedies.
Aspect | Void Contract | Voidable Contract |
Meaning | Invalid from inception; void ab initio. | Valid unless the aggrieved party rescinds. |
Enforceability | Never enforceable by law. | Enforceable until rescinded by the aggrieved party. |
Legal Effect | Creates no contractual rights or obligations. | Creates full rights/obligations until set aside. |
How Created | Lacks essential elements (lawful object, consideration, capacity, free consent) or is illegal/against public policy. | Formed with defective consent (coercion, fraud, misrepresentation, undue influence). |
Parties’ Obligations | None arise. | Bind both parties until rescission. |
Right to Rescind | Not applicable. | Rests with the aggrieved party. |
Rectification/Affirmation | Cannot be cured or validated later. | Can be affirmed (expressly or by conduct) and continue. |
Remedies | No contractual damages; limited restitution may apply (e.g., Section 65 where an agreement is discovered void or a contract becomes void). | Rescission plus damages/restoration, subject to facts and statute. |
Examples | Agreement to do an illegal act; agreement without consideration (subject to Sec. 25 exceptions); minor’s agreement. | Contract signed under coercion/undue influence; contract induced by fraud/misrepresentation. |
Legal Standing | No standing at any time. | Has legal standing unless and until rescinded. |
Burden/Choice | No choice—void by law. | Choice lies with the aggrieved party to affirm or avoid. |
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Legal Consequences of Void and Voidable Contracts
Understanding the difference between void and voidable contract is crucial because it determines enforceability, the right to rescind, and available remedies. In Indian law, these consequences flow from the Indian Contract Act, 1872 and shape how parties enter, continue, or terminate agreements.
Legal Consequences of Void Contracts
A void contract is invalid from inception (void ab initio) and never enforceable. No contractual rights or obligations arise, and contractual damages cannot be claimed. In limited situations, restitution may be available under Section 65 (e.g., where an agreement is discovered void or a contract becomes void), but not generally for void ab initio cases like minor’s agreements. Typical void scenarios include illegal objects, agreements opposed to public policy, or agreements without consideration (subject to Section 25 exceptions).
Legal Consequences of Voidable Contracts
A voidable contract is valid and enforceable until rescinded by the aggrieved party whose consent was vitiated by coercion, fraud, misrepresentation, or undue influence. Until rescission, both parties remain bound. On valid rescission, the aggrieved party may seek damages and/or restitution, subject to facts and statutory limits. If the aggrieved party affirms the contract (expressly or by conduct), it continues and remains enforceable.
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Summary
Knowledge of the difference between void and voidable contracts helps people figure out if a contract can be enforced, what the risks are, and what their options are before they sign. Voidable meaning (or the meaning of voidable) is "valid unless the aggrieved party rescinds it," while void meaning in law is "invalid from conception and never enforceable." Familiarizing yourself with the difference between void and voidable agreements will lead to better writing, more informed consent, and faster resolution of disputes. Check out these definitions, examples, and comparison table to help you decide whether to carry out, back out, or ask for compensation or damages.
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Difference Between Void and Voidable Contract: FAQs
Q1. What is the difference between void and voidable contract?
The difference between void and voidable contract is enforceability. A void contract is invalid from the start and cannot be enforced. A voidable contract is valid unless the aggrieved party rescinds it due to coercion, fraud, misrepresentation, or undue influence.
Q2. What is the void meaning in law?
Void meaning in law: an agreement that lacks legal effect from inception. It creates no rights or obligations and is never enforceable.
Q3. What is the voidable meaning in contracts?
Voidable contract is a contract that is legally valid but may be set aside by the aggrieved party. Until rescinded, it remains enforceable.
Q4. What is the difference between void and voidable agreement in simple words?
A void agreement is a legal nullity from day one. A voidable agreement is binding until the wronged party chooses to cancel it; if affirmed, it continues.
Q5. Is a voidable contract enforceable in court?
Yes, a voidable contract is enforceable unless and until the aggrieved party rescinds it. After valid rescission, the party may seek restoration and, where applicable, damages.
Q6. Can a void contract become valid later?
No. A void contract cannot be cured by consent or later actions. Limited restitution may apply in some scenarios, but the contract itself remains unenforceable.
