If you want to know about contracts, you must be familiar with the terms “void” and “voidable.” These two terms can be confusing, but they are essential to understand if you want to avoid legal troubles. So, what is a void and voidable contract, and how do they differ?
A void contract is a contract that never existed in the first place. This means that the contract was never valid, and thus, had no legal effect. A contract can be void if it was created for an illegal purpose, if one of the parties did not have the legal capacity to enter into the contract or if the terms of the agreement were impossible to fulfill. For example, if you agree to sell a product that is illegal, like drugs, the contract will be void. Similarly, if you enter into a contract with a minor, the contract will be void because the minor does not have the legal capacity to enter into a contract.
On the other hand, a voidable contract is a contract that is valid but can be canceled or avoided by one of the parties. In other words, a voidable contract is a contract that is legally binding, but one of the parties has the right to terminate the agreement. A contract can be voidable if one of the parties entered into the agreement under duress, coercion, or fraud. For example, if you sign a contract because someone threatened you, the contract is voidable because you signed it under duress.
It`s essential to understand the difference between void and voidable contracts because it can have significant consequences. A void contract is not valid, and neither party is bound by its terms. If you create a void contract, you may not be able to enforce its terms, and you may be liable for any damages that result from the agreement. On the other hand, a voidable contract is valid until it is canceled by one of the parties. If you enter into a voidable contract, you need to be aware that the other party may choose to cancel the agreement at any time.
In conclusion, understanding the difference between void and voidable contracts is crucial when entering into legal agreements. A void contract is not valid, and a voidable contract is legally binding but can be canceled or avoided. If you have any doubts about the validity of a contract, it`s always best to seek legal advice.