In contract law, "void" and "voidable" agreements are two distinct concepts that describe the legal status of contracts:
1. Void Agreement:
- A void agreement is one that is not legally valid from the outset. It is as if the contract never existed, and it lacks legal effect.
- These agreements are typically unenforceable because they violate the law or public policy. Examples include contracts for illegal activities or contracts with minors in some jurisdictions.
- Since they are fundamentally flawed, neither party can enforce the terms of a void agreement, and any property or money exchanged under such an agreement may need to be returned.
2. Voidable Agreement:
- A voidable agreement, on the other hand, is initially valid but has factors that allow one party to choose whether to affirm or void the contract.
- These factors might include fraud, misrepresentation, duress, undue influence, or lack of capacity (e.g., one party was mentally incapacitated at the time of contract formation).
- The party with the option to void the contract can choose to either affirm it or void it, depending on their circumstances and interests.
- If the party with the voidable option decides to void the contract, it becomes void and unenforceable. However, if they decide to affirm it, the contract remains valid and enforceable.