Question

Choose the correct answer based on the following statements:
1. All void contracts are not necessarily illegal.
2. All illegal contracts are void.

• A. Only (1) is true
• B. Only (2) is true
• C. Both (1) and (2) are true
• D. Both (1) and (2) are false

Hint:

Void \(\neq\) Illegal always. Illegal = Void always. Distinction matters for enforceability and collateral agreements.

Answer 1

The Correct Option is C

Statement 1 is true: A void contract is one that is unenforceable by law (e.g., due to lack of consideration), but it is not necessarily illegal.
Statement 2 is also true: All illegal contracts (such as those involving fraud, or against public policy) are void ab initio and cannot be enforced by law.
Summary:
- Illegal contracts are always void.
- Void contracts are not always illegal (they could be due to technical defects).