Question

Clearly distinguish between a valid contract, a voidable contract, and a void agreement. Provide an example of each type of agreement and demonstrate how the court would treat each of your situations if they were litigated.

Answer 1

● Valid agreement: If a contract contains of its required elements, it is a valid agreement and is enforceable in a court of law.

For example, if a houseowner, who is a major and of sound mind, signed a contract with an appliance retailer to purchase a cooking range. The houseowner pays for it and the retailer delivers the appliance for him to take home. This is a valid contract.

* If either of parties fail to fulfil any of its contractual obligations, it is termed as breach of contract. Breach of contract is categorized as either material or immaterial. Under Material, damages would be presumed making the liability for breach more severe. Immaterial breach doesn’t involve money damages.

● Voidable contract: Voidable contract is a form of contract where it appears to be valid with all relevant elements to be enforceable, but due to certain circumstances or due to some flaws which could make one or both the parties to make the contract void.

A contract entered into with a minor could be an example of voidable contract.

* A contract that is voidable can be corrected through the process of ratification, and it requires all parties to agree to new terms that effectively remove the initial point of contention present in the original contract.

● Void agreement: Void agreement is a contract which as per law, is unenforceable and is void from the beginning. It is never valid due to the absence of one or more elements of a contract.

Example of a void agreement is a contract between a drug dealer and a buyer.

• If an agreement is void, the court would refuse to enforce the contract and leave the parties as it finds them.

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