Business Law

Difference Between Void Agreement And Voidable Contract

Void agreement : Section 2(g) of the Act defines a void agreement as ‘an agreement not enforceable by law’.

  • Example: If Nishant promises his beloved Neha that he would make her a castle in the air, and Neha promises him her undying love if he does so, the agreement has no meaning and is void because it is not enforceable by law.

Voidable Contract: An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of others, is a voidable contract-Section 2(i).

  • Example: Ahmed wants to buy a young, healthy horse from Babu who is a horse trader Babu sells an old sick horse to Ahmed saying that the animal is young and healthy. This is a case of one party (Babu) cheating the other party (Ahmed). Ahmed is the aggrieved party and has the right to break the contract or make the other party fulfill his obligation.

Distinguish Void Agreement And Voidable Contract

Sr. No.BasisVoid Agreement (Contract)Voidable Contract
1DefinitionAn agreement not enforceable by law is said to be a void agreement.An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of other or others is a voidable contract.
2EnforceabilityIs not enforceable by law.Is enforceable by the party whose consent to the contract is not free. He can rescind it or elect to be bound by it.
3Duration Of LegalityIs not enforceable by law from the beginning.Is valid in the beginning and continues to be valid till it is repudiated by the aggrieved party.
4Reason
An agreement is void because it lacks the basic elements of a valid contract.
A contract is voidable when the essential element of free consent is missing and is caused by coercion.

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