Can there be a situation in which a contract is unenforceable by law?
According to the above-stated maxim, any agreement or contract has done which cannot be legally enforced is invalid from the very inception.
Meaning —>invalid from the beginning
Origin —> Latin
In accordance with this maxim, any contract is “void ab initio “which became invalid since it came into existence. The lain term ” Ab initio” means ” from the start”.This maxim is used to mainly describe contracts that are lawfully unenforceable from the very moment they came into existence.
This means that the nullity of the contract goes back to the time when it was initially formed. In a situation where a contract is declared ” void ab initio” it is assumed to have prevailed or occurred.
Situations in which a contract can be declared “void ab initio”
The situations in which any contract is said to be void ab initio are enlisted below:-
- * Persons deprived by the law itself to enter into any contract
- *Alien enemies
- * Foreign Sovereigns and Ambassadors
- * Insolvent
- *Convicted Person
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(10-year-old boy) came into a contract with B ( a moneylender) to mortgage his father’s property in exchange for ₹75,000. Such an agreement is rendered void ab initio as a minor is incompetent to contract.
( a person of unsound mind ) get into a contract with B (neighbour) to transfer all his property in his name. Such a contract is void ab initio because a person of unsound mind is incapable of understanding the terms of a contract.
( declared insolvent ) gets into a contract with D ( a shopkeeper ) to buy a machine on hire- a purchase basis. The payment has to be done in a 12 months period and each instalment of 10000 each. This also is a void contract because an insolvent person cannot contract because he has no money to repay any of his debts and thus cannot get into such contracts.
Mohori Bibee v. Dharmodas Ghose
This was a landmark judgement regarding a minor’s agreement being void or voidable. In the above-mentioned case Dharmodas Ghose ( plaintiff) had mortgaged his property to a moneylender, BrahmoDutt ( defendant) as a minor for securing a loan. The moneylender was fully aware of the fact that Dharmodas was a minor. Later on, a suit was filed against Brahmo Dutt by the minor to recover back his property.
It was held by the Privy Council that the minor’s agreements are void ab initio.
Anderson Ltd. v. Daniel
The parties involved dealt with artificial fertilizer. fertilizer and Feeding Stuff Act 1906 made it illegal to sell artificial fertilizer without giving a receipt describing the percentage of chemicals contained. The seller had not given the invoice, thus the buyer refused to make payment for the goods arguing that the entire contract had been deemed to be invalid.
The court looked at the purpose of the statute and gave the judgement that the contract was illegal between the parties from the time of its formation. As the seller did not comply with the rules of the statute.
Johri v. Mahila Draupati
In this case, a property belonging to a lunatic was transferred by his wife. The transferee had the knowledge that the property belonged to a lunatic. The court held that the sale was invalid since the time it came into existence.
The maxim void ab initio means an agreement which is null from the time it came into existence. Such contracts are not legally recognized by law.