Distinguish between Void Agreement and Voidable Contract

Distinguish between Void Agreement and Voidable Contract

Distinguish between Void Agreement and Voidable Contract

Void agreements are those agreements which are not enforced by law courts. Legally, a void agreement means the contract or agreement is no longer enforceable. A voidable agreement is a formal agreement between two parties that may be rendered, unenforceable for a number of legal reasons. The following are the points of difference between the two.

Void agreement: The type of contract which cannot be enforceable is known as a void contract.

  1. Enforceability: A void agreement is unenforceable at law.
  2. Defects: A void agreement is void ab-initio and its defects cannot be removed.
  3. Rights of Third Party: In a void agreement a third party does not acquire any rights.
  4. Compensation: In a void agreement the person is not entitled to compensation for loss arising due to the non-performance of the agreement.
  5. Collateral Agreement: A collateral agreement to void agreement is a void contract.
  6. Lapse of Time: It can never become a void contract on the expiry of reasonable time.
  7. Free Consent: It is void due to lack of any essentials of a valid contract except free consent.

Voidable Contract: The contract in which one of the two parties has the option to enforce or rescind it, is known as a voidable contract.

  1. A voidable contract is a valid contract until it is rejected.
  2. A voidable contract is not void ab-initio and its defects can be removed.
  3. In a voidable contract, a third party who buys goods in good faith and for consideration before the contract is rejected acquires rights.
  4. In a voidable contract, a person is entitled to compensation for loss arising due to non-performance of the contract.
  5. A collateral agreement to a voidable contract is not a void contract.
  6. It may become a valid contract if the aggrieved party does not reject it within a reasonable time.
  7. It is voidable because the consent of a party is not free.

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