Comprehension
The Contract Act 1872 deals with contract law in India, its rights, duties, and exceptions arising out of it. Section 2(h) of the Act gives us the definition of a contract, which is simply an agreement enforceable by law. To understand the difference between void agreements and voidable contracts it is important to talk about sections 2(h), 2(a). 20), 2(d), 14, 16 (3) and 15,24-28 of the Indian Contact Act. Void agreements are fundamentally invalid making them unenforceable by default. These agreements cannot be fulfilled as they consist of illegal elements, and they cannot be enforced even after subjecting it to both parties. However, in the case of voidable contract, the agreement is initially enforceable, but it is later on denied at the option of either of the parties due to various reasons.
Unless rejected by a party, this contract will remain valid and enforceable. The party who is at the disadvantage due to any circumstance applicable to the contract has the ability to render the agreement void. A void agreement is void ab initio making it impossible to rectify any defects in it while voidable contracts can be rectified. In case of a void agreement, neither of the parties is subject to any compensation for any losses but voidable contracts have some remedies.
A valid agreement forms a contract that may again be either valid or voidable. The primary difference between a void agreement and voidable contract is that a void agreement cannot be converted into a contract.
(Extracted with edits from A Comparative Study of Voidable Contracts and Void Agreements)
Unless rejected by a party, this contract will remain valid and enforceable. The party who is at the disadvantage due to any circumstance applicable to the contract has the ability to render the agreement void. A void agreement is void ab initio making it impossible to rectify any defects in it while voidable contracts can be rectified. In case of a void agreement, neither of the parties is subject to any compensation for any losses but voidable contracts have some remedies.
A valid agreement forms a contract that may again be either valid or voidable. The primary difference between a void agreement and voidable contract is that a void agreement cannot be converted into a contract.
(Extracted with edits from A Comparative Study of Voidable Contracts and Void Agreements)
Question: 1
Which of the following best describes a void agreement?
Which of the following best describes a void agreement?
Updated On: Dec 1, 2024
- An agreement that is valid until declared invalid by a court
- An agreement that has no legal effect from the beginning
- An agreement that is legally enforceable
- An agreement that can be enforced if one party chooses to do so
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The Correct Option is B
Solution and Explanation
A void agreement is described in the passage as being void ab initio (invalid from the start), meaning it has no legal effect from its inception. Unlike voidable contracts, which are valid until one party voids them, void agreements cannot be enforced under any circumstances.
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Question: 2
A contract between two parties to rob a bank and share the proceeds equally can be termed as:
A contract between two parties to rob a bank and share the proceeds equally can be termed as:
Updated On: Dec 1, 2024
- Void Contract
- Valid Contract
- Voidable Contract
- Legally Enforceable Contract
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The Correct Option is A
Solution and Explanation
A contract to rob a bank is illegal and therefore a void contract. Such an agreement is void ab initio (from the beginning) and cannot be enforced by law.
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Question: 3
An agreement made by an adult but involving a minor child where the signatory is a minor child himself, this agreement would be:
An agreement made by an adult but involving a minor child where the signatory is a minor child himself, this agreement would be:
Updated On: Dec 1, 2024
- A valid and enforceable agreement
- A voidable agreement
- A void agreement
- An agreement that cannot be enforced by the minor
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The Correct Option is C
Solution and Explanation
A contract made by a minor is void as per the Indian Contract Act. Such agreements are not enforceable by law, regardless of the other party’s consent.
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Question: 4
Which of the following scenarios would most likely result in a void agreement?
Which of the following scenarios would most likely result in a void agreement?
Updated On: Dec 1, 2024
- An agreement signed by someone under duress
- A contract with mutually agreed terms to sell a house
- An agreement to pay 10 lakhs on getting a government job
- A contract with a minor who understands the terms
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The Correct Option is C
Solution and Explanation
An agreement to pay a certain sum based on the occurrence of an uncertain event like getting a government job could be void due to lack of certainty and legality. It involves an illegal condition, making the agreement void.
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Question: 5
An agreement made without consideration is generally:
An agreement made without consideration is generally:
Updated On: Dec 1, 2024
- Valid agreement
- Enforceable agreement
- Void agreement
- Voidable agreement
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The Correct Option is C
Solution and Explanation
An agreement made without consideration is generally considered a void agreement, as consideration is an essential element for a valid contract under the Indian Contract Act.
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