Void contract

8 Key excerpts on "Void contract"

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  eBook - ePub

  Law Made Simple

  • David Barker(Author)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  These contractual agreements give rise to rights and obligations that the law recognizes and enforces. But certain agreements, such as domestic and social arrangements, are not intended by the parties to be legally binding. The law allows for this. Suppose, if Cumming and Gowing agree to meet for dinner and Gowing fails to turn up, the law will do nothing in the matter. The agreement was not intended to create legal rights and duties, and, as such, it is not a contract in law. Every contract is an agreement, but not every agreement is a contract.

  The object of the law of contract is to identify those agreements that it will enforce and those that it will not. This is of prime importance and will be referred to later in more detail.

  7.1 Essentials of a valid contract

  An agreement will be enforced when the following essential elements exist:

  (a) Offer and acceptance . There must be an offer by one party and an acceptance of it by the other.

  (b) Intention to create legal relations.

  (c) Capacity of the parties. Each party must have the legal capacity to make the contract.

  (d) Consent must be genuine. The consent must not be obtained by fraud, or duress (such as death threats if the contract is not entered into).

  (e) Consideration must be present (except in contracts under seal, i.e. by deed). See p. 123 for a definition of consideration.

  (f) Legality of object. The object of the contract must not be one of which the law disapproves.

  (g) Possibility of performance.

  All the above elements must be present. If one or more is absent the contract will be either (i) void, (ii) voidable or (iii) unenforceable.

  Void contracts are destitute of legal effect; that is, they are not contracts, and agreements of this kind do not confer legal rights on the parties thereto. For example, a contract by an infant to buy goods other than ‘necessaries’. Similarly, if A agrees with B to break into C ’s house and steal if B pays A £10, the contract is void for it is illegal. Neither party can recover from the other on a Void contract, but goods delivered may be recovered by an action in tort because no property (ownership) passes. Money paid under the agreement may be recovered in quasi-contract (see p. 189 ).

  Voidable contracts

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  eBook - ePub

  Law Made Simple

  • David L.A. Barker, David L. A. Barker(Authors)
  • 2020(Publication Date)
  • Routledge

    (Publisher)

  These contractual agreements give rise to rights and obligations that the law recognizes and enforces. But certain agreements, such as domestic and social arrangements, are not intended by the parties to be legally binding. The law allows for this. Suppose, if Cumming and Gowing agree to meet for dinner and Gowing fails to turn up, the law will do nothing in the matter. The agreement was not intended to create legal rights and duties, and, as such, it is not a contract in law. Every contract is an agreement, but not every agreement is a contract.

  The object of the law of contract is to identify those agreements that it will enforce and those that it will not. This is of prime importance and will be referred to later in more detail.

  7.1 Essentials of a valid contract

  An agreement will be enforced when the following essential elements exist:

  1. Offer and acceptance . There must be an offer by one party and an acceptance of it by the other.
  2. Intention to create legal relations.
  3. Capacity of the parties. Each party must have the legal capacity to make the contract.
  4. Consent must be genuine. The consent must not be obtained by fraud, or duress (such as death threats if the contract is not entered into).
  5. Consideration must be present (except in contracts under seal, i.e. by deed). See p. 126 for a definition of consideration.
  6. Legality of object. The object of the contract must not be one of which the law disapproves.
  7. Possibility of performance.

  All the above elements must be present. If one or more is absent the contract will be either (i) void, (ii) voidable or (iii) unenforceable.

  Void contracts are destitute of legal effect; that is, they are not contracts, and agreements of this kind do not confer legal rights on the parties thereto. For example, a contract by an infant to buy goods other than ‘necessaries’. Similarly, if A agrees with B to break into C ’s house and steal if B pays A £10, the contract is void for it is illegal. Neither party can recover from the other on a Void contract, but goods delivered may be recovered by an action in tort because no property (ownership) passes. Money paid under the agreement may be recovered in quasi-contract (see p. 192 ).

  Voidable contracts

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  Law

  Made Simple

  • D. L. A. Barker, C. F. Padfield(Authors)
  • 2014(Publication Date)
  • Made Simple

    (Publisher)

  1. Essentials of a Valid Contract An agreement will be enforced when the following essential elements exist: (a) Offer and Acceptance. There must be an offer by one party and an acceptance of it by the other. (b) Intention to create legal relations. (c) Capacity of the parties. Each party must have the legal capacity to make the contract. (d) Consent must be genuine. The consent must not be obtained by fraud, or duress, for example. 112 The Law of Contract 113 (e) Consideration must be present (except in contracts under seal, i.e. by deed). (/) Legality of object. The object of the contract must not be one of which the law disapproves. (g) Possibility of performance. All the above elements must be present. If one or more is absent the contract will be (i) void, (ii) voidable, or (iii) unenforceable. Void contracts are destitute of legal effect; that is, they are not contracts, and agreements of this kind do not confer legal rights on the parties thereto. For example, a contract by an infant to buy goods other than 'necessaries'. Similarly, if A agrees with B to break into C's house and steal if B pays A £10, the contract is void for it is illegal. Neither party can recover from the other on a Void contract, but goods delivered may be recovered by an action in tort because no property (ownership) passes. Money paid under the agreement may be recovered in quasi-contract (see p. 189). Voidable Contracts are those which may be made void at the instance of one of the parties. For example, a contract which is induced by fraud can be avoided by the party deceived. Unenforceable Contracts are those which are valid but are unenforce-able at law because of the absence of (i) evidence of the contract or (ii) the form required by law. For example, some contracts which are not 'evidenced in writing' are unenforceable at law. So, too, are contracts barred by the Limitation Act, 1980.

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  Contract Law in Russia

  • Maria Yefremova, Svetlana Yakovleva, Jane Henderson(Authors)
  • 2014(Publication Date)
  • Hart Publishing

    (Publisher)

  The important difference between a Void contract and a contested contract (or, for example, contested terms within a contract) is that a Void contract is invalid irrespective of any court action but a contested contract only becomes invalid when declared so by a court (CC article 166(1)). The situation with regard to Void contracts is slightly complex. A contract is void when particular circumstances specified in law are present, irrespective of whether it has been deemed void by a court. The types of circumstances which render a contract void are discussed in detail below; they are such things as ille-gality, immoral purpose, lack of capacity, and similar. However, a party must apply to court and prove that the relevant legal grounds for invalidity are indeed present which make the contract void, otherwise they are unable to enforce the consequences of the contract’s invalidity. The concept of a contested contract has some similarity to the English con-cept of a voidable contract; that is, that the contract exists until it is ‘avoided’, although in Russia, unlike in England, that step must be taken by a court. Thus if a contract under Russian law has been concluded and has not been contested by a party or other person with standing to contest it (discussed below), the contract remains in force. Property passes under the contract and can be passed to a third party, unless and until the contract is successfully contested. Again in contrast to English law, the right to contest such a contract is not extinguished when the property is passed to a third party but when the limitation period stipulated by law expires. In practice the difference between a contested and a Void contract is as fol-lows. If a party to a contract considers a contract or particular term within it void, they can refuse to perform, referring to CC article 167(1) which provides that invalid contracts do not entail any legal consequences.

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  Commercial Contracts

  A Practical Guide to Deals, Contracts, Agreements and Promises

  • Chris Thorpe, John Bailey(Authors)
  • 1996(Publication Date)
  • Woodhead Publishing

    (Publisher)

  So while inva-lidity is an important legal subject, the businessman needs only a sufficient knowledge of it to enable him to avoid entering into an invalid contract. 10.1.2 Types of invalidity A contract may be void, voidable or unenforceable, and we need to understand the difference between these three terms. 1. Void contract: A Void contract is neither valid nor enforceable. In the eyes of the law, and no matter what the parties may have thought, there never was a contract in the first place. It follows that neither party is bound to perform his obligations under that contract and no legal action can be maintained against him if he fails to do so. An extreme and obvious example of a Void contract is an underworld 'contract', that is an agreement to kill. 2. Voidable contract: A voidable contract is a valid and enforceable contract which one party has the right to nullify (or, in legal language, 'avoid'). If he exercises that right the contract is then void with retrospective effect, as if it had never existed. If he does not exercise that right the contract remains valid and enforceable. We noted in section 2.2.2 that, with certain excep-tions, a contract entered into by a minor is voidable at his option. 3. Unenforceable contract: Normally if a contract is unenforceable then neither party can maintain a legal action against the other if he fails to perform it. Although in legal theory an unenforceable contract is valid, both parties can ignore their obligations under it with impunity. There is therefore no practical distinction be-tween a contract which is void and a contract which is merely unenforceable. An example of an unenforceable contract is an agreement to marry, which has been unenforceable since 1971 by Section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1970. Another example, as we saw in section 1.2.5, is an oral guarantee. 217

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  The Common Law

  • Oliver Wendell Holmes Jr., Oliver Wendell Holmes(Authors)
  • 2020(Publication Date)
  • Routledge

    (Publisher)

  CONTRACT.—III. VOID AND VOIDABLE    

  T HE elements of fact necessary to call a contract into existence, and the legal consequences of a contract when formed, have been discussed. It remains to consider successively the cases in which a contract is said to be void, and those in which it is said to be voidable,—in which, that is, a contract fails to be made when it seems to have been, or, having been made, can be rescinded by one side or the other, and treated as if it had never been. I take up the former class of cases first.

  When a contract fails to be made, although the usual forms have been gone through with, the ground of failure is commonly said to be mistake, misrepresentation, or fraud. But I shall try to show that these are merely dramatic circumstances, and that the true ground is the absence of one or more of the primary elements, which have been shown, or are seen at once, to be necessary to the existence of a contract.

  If a man goes through the form of making a contract with A through B as A’s agent, and B is not in fact the agent of A, there is no contract, because there is only one party. The promise offered to A has not been accepted by him, and no consideration has moved from him. In such a case, although there is generally mistake on one side and fraud on the other, it is very clear that no special doctrine need be resorted to, because the primary elements of a contract explained in the last Lecture are not yet present.

  Take next a different case. The defendant agreed to buy, and the plaintiff agreed to sell, a cargo of cotton, “to arrive ex Peerless from Bombay.” There were two such vessels sailing from Bombay, one in October, the other in December. The plaintiff meant the latter, the defendant the former. It was held that the defendant was not bound to accept the cotton.1

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  Beginning Business Law

  • Chris Monaghan(Author)
  • 2015(Publication Date)
  • Taylor & Francis

    (Publisher)

  The fourth requirement needed for there to be a legally enforceable contract is that both parties to the contract must have the capacity to contract. Children, those who are mentally incapacitated and those who are intoxicated do not have the capacity to contract. However, s.3(2) of the Sale of Goods Act 1979 states that where a person without capacity purchases goods then he must pay a reasonable price for them.

  Intention to create legal relations

  The final requirement is that the parties to a contract must intend to create legal relations. In Balfour v Balfour [1919] 2 KB 571 the court held that there was a presumption that where a married couple enter into an agreement they do not intend to make a legally enforceable contract. This applies to other agreements made in a domestic or family setting. Conversely, there is a presumption that in a commercial agreement there is an intention to create legal relations. Both presumptions can be rebutted.

  On-the-spot question

  ?

  Sarah, Snow Ltd’s managing director, has the authority to enter contracts on behalf of Snow Ltd. Sarah is at a trade conference and has just delivered a paper on modern business practice; as her paper went well, she decides to drink several large glasses of wine to celebrate. After finishing the wine Sarah bumps into the manager of a timber supplier who has a trade stand at the conference, and she agrees to purchase £189,000 worth of timber on Snow Ltd’s behalf.

  Discuss whether there is a legally binding contract.

  VITIATING FACTORS

  Key definition: Void

  Where a contract is void it is treated as if it never existed.

  Key definition: Voidable

  Where a contract is voidable it will continue to exist unless the innocent party is able to persuade the court to set the contract aside.

  A contract can be invalid where there is a vitiating factor present. It is important to note that depending on which factor is present the contract could be void, which is treated as if it never existed, or voidable, which means that the party seeking to set the contract aside must ask the court to avoid the contract. The court does not have to do this.

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  Introduction to Law

  • Beth Walston-Dunham(Author)
  • 2019(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  The same applies to clothing. Even the utilities in our homes, such as heat, water, and electricity are received through contractual agreements to provide and pay. As technology grows and society changes, the potential for contractual agreements (and disputes) grows. This chapter discusses the basic and settled principles of contract law. Apart from slight variations or modifica -tions in each state, these principles continue to be the accepted standards by which persons who enter into con -tractual agreements should guide their conduct. Typically, when new situations arise, the essential principles of contract law are modified or adapted to reach a result that is fair and consistent with precedent when possible. The leading authorities on contract law have defined a contractual agreement as a legally enforceable and voluntary promise exchanged by two or more parties to provide the terms of the promise in exchange for some -thing of value, known as consideration . 1 In essence, this means that if parties make a promise or promises to one another, those parties are obligated to perform (complete) the terms of the promise(s). Consequently, if a party fails to complete the obligations of a promise, the party who is injured by not receiving that to which he or she is entitled by the promise will have recourse in the courts against the party who broke the promise. For example, a person who borrows money from a bank promises to repay the money. If that person fails to repay the money, the bank can go to court and attempt to collect the money that is owed. 480 CHAPTER 13 ELEMENTS OF A VALID CONTRACT Every valid contract has certain characteristics. If any of them are absent, the enforce -ability of the agreement comes into question. Essentially, every contract must have parties who provide some act or benefit that the other party does not otherwise have the legal right to receive.

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