Void Agreement under Contract Act: Everything You Need to Know
A contract is a legally binding agreement between two or more parties. It becomes void when it is not legally enforceable. In other words, it lacks legal standing and cannot be enforced by the law. Void agreements are an important part of contract law, and understanding what they are is crucial.
What is a Void Agreement?
A void agreement is a contract that has no legal effect from the beginning. It cannot be enforced by either party because it is legally invalid. According to Section 2(g) of the Indian Contract Act, 1872, an agreement not enforceable by law is void.
A void agreement is distinguished from a voidable contract. A voidable agreement is one where the parties have the option to choose whether or not to enforce it. For example, a contract signed under duress or coercion is voidable. The aggrieved party has the option to either enforce or reject such an agreement.
Types of Void Agreements
There are several types of agreements that are considered void under the Indian Contract Act:
1. Agreement without consideration: An agreement that is made without any consideration or benefit to either party is void.
2. Agreement with unlawful object or consideration: An agreement that is made with an object or consideration that is illegal or against public policy is void.
3. Agreement with a minor: A contract with a minor is void as minors are not competent to enter into a contract.
4. Agreement by a person of unsound mind: A contract is void if one of the parties to the contract is not of sound mind, and the other party is aware of that fact.
5. Agreement by coercion or under undue influence: A contract entered into under coercion or undue influence is void.
6. Agreement with uncertainty: A contract is void if it is uncertain, vague, or ambiguous. The terms of the agreement should be clear and unambiguous.
Effects of Void Agreements
A void agreement has no legal validity from the beginning. Thus, it cannot be enforced by either party. It does not create any legal obligation or right on any party, and it does not transfer any property or benefit. For instance, a person who has paid money under a void contract cannot recover the money in any legal proceeding.
However, if an agreement is partially void due to the illegality of some terms, the valid portion of the agreement may still be enforceable.
Conclusion
In conclusion, it is essential to understand the concept of void agreements under the Indian Contract Act. A void agreement is a contract that has no legal effect from the beginning, and it cannot be enforced by either party. Various factors such as unlawful object, lack of consideration, or agreement with a minor result in a void agreement. It is, therefore, crucial to ensure that you enter into legally enforceable contracts to avoid disputes and legal proceedings.