Void agreements and void contracts may seem like interchangeable terms, but there are significant differences between the two. Both types of agreements have legal implications, but the nature of void agreements and void contracts is distinct, and it is essential to know the contrasting factors.
What is a Void Agreement?
A void agreement is an agreement that is not enforceable by law. In simple words, it means that the contract cannot be enforced under any circumstances, and it`s a pointless piece of paper. An agreement that suffers from the lack of legal enforceability is deemed void, and therefore, it holds no legal position in the eyes of the law.
The primary reasons for declaring an agreement void:
1. Agreement made without free consent
2. Agreement made with a minor
3. Agreement made with a person of unsound mind
4. Agreement made with illegal consideration
5. Agreement with a prohibited object
All of these make an agreement void and thus rendered unenforceable. In fact, any agreement against public policy is considered to be void and unenforceable.
What is a Void Contract?
A void contract, on the other hand, is a contract that was valid at the time of formation but later became unenforceable. Unlike void agreements, void contracts have a legal position at the time of formation, but due to some specific circumstances, the contract becomes invalid at a later stage.
The primary reasons for declaring a contract void:
1. Agreement entered into under coercion or undue influence
2. When the contract is made with a minor
3. When the contract is made with a person of unsound mind
4. When the contract has a prohibited object
5. When the contract is illegal
Unlike a void agreement, a void contract is considered valid until it is declared void by law or due to specific circumstances.
The difference between Void Agreement and Void Contract
The primary difference between a void agreement and a void contract can be summarised in a single statement – a void agreement is void from the beginning, while a void contract is void from a later stage.
Void agreements are void because it had no legal position at any point, while void contracts become void because of events after the formation of the contract that made it unenforceable.
In conclusion, there are significant differences between void agreements and void contracts. While both are unenforceable and have legal implications, the nature of the legal position is distinct. It is essential to understand the differences between a void agreement and void contract so that you can differentiate the two and make informed decisions.