What Is Difference between Void Contract and Voidable Contract

As a professional, I understand the importance of creating content that is not only grammatically correct but also optimized for search engines. In this article, we will explore the difference between void and voidable contracts.

Contracts are legal agreements that bind two or more parties. However, not all contracts are created equal. Some contracts are void while others are voidable. Understanding the difference between the two is crucial for anyone looking to enter into a legal agreement.

Void Contract

A void contract is an agreement that is not legally binding from the beginning. This means that the contract is not enforceable by law, and therefore, neither party can claim any legal benefits or obligations resulting from the contract. In essence, a void contract is considered as if it never existed.

There are several reasons why a contract might be considered void. For example, if the contract is based on illegal activities, it will be considered void. Similarly, if one of the parties is not legally competent to enter into an agreement, such as a minor or someone who is mentally incapacitated, the contract will also be considered void.

Voidable Contract

A voidable contract, on the other hand, is an agreement that may be legally binding at the time of its formation, but one or both parties have the right to cancel or void the contract. In this case, the contract becomes voidable when one of the parties decides to rescind the agreement.

There are several reasons why a contract might be considered voidable. For example, if one party was forced into the agreement through coercion or duress, they have the right to void the contract. Similarly, if the contract was based on fraudulent or misrepresented information, the affected party has the right to cancel the agreement.

Key Differences

The key difference between a void and voidable contract is that a void contract is not legally binding from the beginning, while a voidable contract may be legally binding but can be canceled or voided by one or both parties. In a void contract, the agreement is considered as if it never existed, while in a voidable contract, the parties have the ability to rescind the contract.

Conclusion

In summary, understanding the difference between a void and voidable contract is essential for anyone entering into a legal agreement. A void contract is not legally binding from the beginning, while a voidable contract may be legally binding but can be canceled or voided by one or both parties. Knowing the legal implications of these types of contracts can help individuals make informed decisions when entering into legal agreements.

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