DISTINCTION BETWEEN VOID, VOIDABLE, ILLEGAL AND UNENFORCEABLE CONTRACTS

 

DISTINCTION BETWEEN VOID, VOIDABLE, ILLEGAL AND UNENFORCEABLE CONTRACTS:

 

A. The differences between void contracts and voidable contracts are as follows.

 

1.  In void contract no obligation or right arises or accrues to parties to the contract and such contracts are not covered by law. Whereas a voidable contract continues at the option of one party; it is the desire of one party either to rescind it or continue, it is enforceable at the option of one party and is covered by law.

2.  A void contract can give rise to no legal liability since transaction is nullity. Whereas a voidable contract remains valid until rescinded.

3.  A void contract cannot confer any right. While a voidable contract confers enforceable right till it is not rescinded.

4.  The contract becomes void when it ceases to be enforceable. On the other hand, a contract becomes voidable only when consent to agreement is obtained by coercion, undue influence, fraud or misrepresentation.

5.  A void contract cannot be made valid by parties to the contract by their consent. Whereas a voidable contract can be made valid by the party who has a right to rescind it by giving up his right of rescinding it.

6.  A void contract is entered is entered into on account of special reasons. Whereas voidable contracts are also entered into an account of special reasons, but these reasons differ from the reasons which make contract void.

7.  Void contract is defined in section-2(i) and such contracts have been detailed in section-24-30,32,35,36 and 56 of the Indian Contract Act,1872. On the other hand, voidable contract is defined in section-2(i) and such contracts have been detailed in section-19,19A,38,39,55,64 and 66 of the Act as also section 14-18.

 

B. Distinction between void and illegal contract is as follows.

 

1.  A void contract is merely voidable. The parties to a void contract are not necessarily liable to penalty. On the other hand, the parties to an illegal contract are liable to be punished.

2.  In a void contract, collateral contracts are recognized. Whereas, in an illegal contract, the collateral are also illegal.

 

Distinction between illegal and unenforceable contract is as follows.

 

1.  Illegal Contract: If the consideration and object of the contract is not lawful, the same will be termed as illegal contract. section 23 of the Indian Contract Act 1872 mentions what consideration and objects of an agreement are lawful and what not. All illegal contracts are void but all that are void are not necessarily illegal; for instances, a wagering agreement is indeed void but not illegal. An illegal contract is like contagious disease and is fatal not only to main contract but to collateral contracts as well.

2.  Unenforceable Contracts: An unenforceable contract is a valid contract but that cannot be enforced because of certain technical defects, for example by want of stamp, by war of limitation, by breaking of war between the nations of trading parties etc. It is valid but incapable of proof. Such type of contract, in India, are also termed as void contract, but in English law they are regarded as unenforceable contracts.

 

But for enforceability this kind of contracts are as good as valid contract. lack of certain, technical qualifications, these contracts contain all those qualities which a valid contract possesses. However, the fate of these contract is similar to that void contract.