Specifically, it can be said that a void contract is always void, but when we talk about void contract, this is one that is initially chargeable but is absent due to changes in government policy or some other reason. So here we have an in-depth discussion of the difference between invalid contract and void contract.
|basis of comparison||Canceled contract||invalid contract|
|meaning||Void agreement refers to an agreement that is not legally enforceable and has no legal consequences.||A void contract implies a valid contract that is no longer legally enforceable, becoming an invalid contract when unenforceable.|
|Invalid ab initiation||It’s null from the start.||It is valid at first but becomes invalid later on.|
|validity period||It’s never valid.||It is valid until it is no longer applicable.|
|causes||Because of the lack of one or more of the most important things.||Due to impossibility of execution.|
|contract requirement||If the contract is formed, then all the conditions of the contract will not be met and therefore will be void.||With the conclusion of the contract, all the requirements of the contract are fulfilled, which becomes void due to certain circumstances.|
|restitution||In general, a refund is not permitted, but the court may grant a refund on reasonable grounds.||Refunds are allowed if the contract is found to be void.|
Definition of Canceled Contract
A void agreement is defined in Section 2(g) of the Indian Contracts Act 1872 as an agreement that is not legally enforceable, ie such agreements cannot be challenged in court. Such an agreement has no legal consequences and does not confer any rights on the interested parties. A void contract is void from the day it is created and can never be converted to the contract.
To be enforceable, an agreement must contain all the essential elements of a valid contract, as described in Section 10 of the Act. Failure to perform one or more essential elements of a contract during contract writing will invalidate the contract. Some agreements expressly declared void include:
- Combining incompetent parties, like an insane little extraterrestrial enemy.
- Agreement whose consideration or objection is illegal.
- The agreement that prevents a person from getting married.
- An agreement in which both parties are in fact guilty and essential to the agreement.
- The agreement that restricts trade.
- Betting agreements etc.
example : Suppose Jimmy offers David (the minor) to deliver 1,000 kg of wheat for 20,000 rupees at some future date, but B does not deliver the specified amount of wheat to Jimmy. Now Jimmy cannot sue David because David is a minor and a deal with Moll is not ab initio.
Definition of null contract
Section 2(j) of the Indian Contracts Act 1872 defines a void contract as a contract that no longer remains valid and cannot be performed in court. Such contracts have no legal force and cannot be performed by either party.
Invalid contracts are valid when entered into, as they meet all the conditions of enforceability established in article 10 of the Law and are binding on the parties, but later become invalid due to impossibility of execution. Such contracts become unenforceable for legal reasons because
- monitor the impossibility
- change in law
- Subsequent illegality
- Denial of voidable contract
- contingency contract, etc.
example : Suppose Nancy, a popular dancer, hires Alpha Company to dance in a show. Unfortunately, an accident happened a few days before the event, in which her legs were seriously injured, and the doctor was not allowed to dance. In this case, the contract expires.
Main differences between invalid contract and void contract
The following points are worth noting when it comes to the difference between an invalid contract and a void contract:
- A void agreement is one that is not enforceable by law or has legal consequences. A void contract, on the other hand, is a contract valid at the time of constitution, but which becomes unenforceable due to impossibility or illegality.
- A void contract is void from its creation. On the other hand, a void contract is valid at the time of creation but later becomes invalid.
- A void contract is never valid, while an invalid contract is a valid contract as long as it is unenforceable.
- A void contract is void because one or more necessary elements that lead to a contract are missing. On the contrary, a void contract is a contract that becomes ineffective due to the impossibility of performance.
- The void contract does not meet the requirements of a valid contract and is therefore considered void. On the other hand, a voidable contract is one that meets all the requirements of a valid contract but cannot be performed due to unexpected circumstances and therefore becomes void.
- If the contract is voided, no refunds or restorations will be given. However, in certain circumstances, refunds are permitted on reasonable grounds. On the contrary, reimbursement will be granted to the interested party when the contract in force eventually becomes invalid.
So you can understand the terms in detail from the discussion and example above. While a void contract does not create any legal obligation. On the other hand, legal obligations arising from the formation of a valid contract end with the nullity of the contract.