Saraa Gamal

14/04/09

Business Law

Comparison between a void and a voidable contract

1. Definition

A void contract is a contract which doesn’t produce any legal effect from the outset. An
agreement to carry out an illegal act is an example of a void contract or void agreement.
A voidable contract is a contract which begins as a legal contract, but may be (but not
necessarily will be) nullified.

2. Reasons

A contract is void when:

- It has no object, no reason or when its object is not included in the commerce or when it
is indeterminable
- It has an object that go against the public policy or the morality
- It is a formal contract but the formalities have not been complied with
- It was made by a person devoid of discretion but didn’t attain the majority yet

A voidable contract is:

- A contract that have not been made by a person who attain his majority
- One made by a person who made a mistake, fraud, duress, or exploitation

3. Characteristics

A void contract doesn’t produce any legal effect (no rights and no obligations).
Moreover, if the court makes a contract and someone invoke that the contract is void, the
court must cancel it and not the person. The nullity of the contract will not disappear even
if one of the party or both of them made a confirmation that the contract is void

A voidable contract is one which begins like a legal contract and produces rights and
obligations. With a voidable contract, only the protected party has the right to give his
avoidance and not the other. A confirmation is needed to avoid the contract. Finally if the
contract is annulled, the two parties go back to the same position as if nothing had been
made and everything must be restored if someone paid something to the other for
example.