Difference between Void agreements and Void contracts
By:- thelawiq.com Author
DEFINITION OF CONTRACT– Every agreement and promise enforceable at a court of law is a contract.
Section 2(h) of THE INDIAN CONTRACT ACT,1872.
Difference between Void agreements and Void contracts–
|Void Agreement||Void Contract|
|Meaning||It is an agreement which is void and not enforceable by law.||It refers to a contract which is valid at the time of creation but becomes void due to certain reasons.|
|Void-ab-initio||Void from very beginning.||Valid at the beginning and later on becomes void.|
|Period of validity||It is never valid.||Valid till it becomes void.|
|Causes||Due to absence of essential elements.||Due to impossibility of performance.|
|Examples||Agreement without consideration or agreement with minor.||Contract with another country and war declares with that country.|
CASE LAW- Alice Mary Hill v William Clarke
In this case, the plaintiff (Hill) a married woman had agreed to live in adultery with the defendant as well as serve him as the housekeeper.
In return, the defendant had agreed to pay the plaintiff a consolidated remuneration (payment) of 50 Dollars per month.
In this instance, the Court held that the lawful part of the agreement cannot be separated from the unlawful part as the entire agreement was rendered void.
The plaintiff was unable to recover any form of compensation, even for the service she provided as a housekeeper.
CASE LAW- Lowe v. Peers
In this case, the defendant (Peers) had promised the plaintiff (Mrs. Lowe) that he would not marry any other person, other than the plaintiff and also promised to pay an amount of 200 pounds if the promise was not fulfilled.
The agreement was rendered void as it stood against the public policy of lawsl.
CASE LAW- Lafatunissa v. Shaharbanu
In this case, it was held that any agreement comprising of a condition in Wakf, that a widow would forfeit her right to claim maintenance on re-marriage, shall not be considered as an agreement in restraint of marriage.
CASE LAW- Madhub Chander v. Rajcoomer Dass
In this case, where A and B who carried out business in the same locality in Kolkata agreed. B offered to pay A some amount of money if A closed his business.
A closed his business but later sued B to recover the amount of the agreement he entered into with B to recover the amount promised.
It was held that even though the order had been partial in curtailing A from conducting his business in a particular area, but since it put a restraint on trade, it was held to be void and consequently, A was not allowed to recover the amount.
CASE LAW- Tapash Majumdar v. Pranab Dasgupta
In this case, a rule of the East Bengal Club for conducting an election for the Executive Committee of the Club authorizing the Executive Committee to take action against any of its members who approached the Court to challenge the election process of the Club was held contrary to the provisions of Section 28 of the Contract Act and was deemed to be void.
CASE LAW- Kalyan Singh v. Ranjot Singh
In this case, there was an agreement between the plaintiff and the defendant regarding the purchase of an item. The payment was to be made by the defendant through a cheque, the enforcement of that cheque, was however contingent on the delivery of the goods.
But the said cheque was dishonored due to insufficiency of funds.
In the resolution of the dispute, it was devised by the Court that there was ambiguity in payment methods, an essential part of the agreement. Such uncertainty had rendered the agreement void under the provisions of Section 29.
CASE LAW- Carlill v. Carbolic Smoke Ball Co.
Hawkins, J., has delineated that a wager is an agreement where the parties to the wager should have opposite views concerning a future uncertain event. The opposing views could be concerning a past or future event or facts as well.
CASE LAW: Frost v. Knight
In this case, the plaintiff was promised by the defendant, of marriage upon the death of the defendant’s father. However, before the death of the father, the defendant broke off the engagement. The plaintiff sued the defendant, before the death of the defendant’s father on breach of contract and was successful.
CASE LAW: Punj Sons Pvt. Ltd. v. Union of India
The plaintiff’s company (Punj) in New Delhi entered into a contract with Union of India for the supply of 8,420 milk containers of 20 liters each duty coated with “hot-dip coating”.
The parties were aware of the fact that such coating is composed of tin ingots, a controlled item that was not available in the market without a release order from the Director-General of Supplies and Disposals. Despite reasonable efforts on part of the petitioners to obtain the release of the necessary quota of tin ingots, the same was not done.
It was held that the performance of the contract became void due to impossibility of performance furthermore; the promisors couldn’t be made at risk to pay harm for the breach of contract.
Case Law: Salima Jabeen v. National Insurance Co. Ltd
The appealing party went into an agreement of protection of her property against fire with the respondent company.
After assessment of the damaged property and deliberation with the plaintiff, a compensation amount was decided and later paid to the plaintiff by the defendant company.
Upon acceptance of such compensation and refusing to make further claims, the plaintiff forfeited her right of further claims and released the defendant company from further obligations.
The terms and conditions of an agreement can unquestionably be changed or adjusted. However, it cannot be done unilaterally unless there exists any provision either in the contract itself or in law.
Therefore, with the above discussion and example, you might be able to understand the terms in detail. While a void agreement does not create any legal obligation. On the other hand, the legal obligations created during the formation of a valid contract comes to an end, when the contract becomes void.