Void Contracts

In contract law, a void contract is a type of contract that is fundamentally unenforceable and has no legal effect from the moment it was created. In other words, it is as if the contract never existed. Void contracts are void from the beginning (void ab initio) and hence different from voidable contracts, which are initially valid but can be voided by one of the parties later due to certain circumstances.

Lack of capacity: Contracts entered into by individuals who lack the legal capacity (e.g. under the age of consent, incapacitated) to understand the consequences of their actions are often void. This includes minors who are under the age of consent and individuals with severe mental incapacities. These parties may not have the legal capacity to enter into binding agreements, and thus, the contract may be considered void if it involves such individuals.

Bilateral mistake: A material bilateral mistake occurs when both parties to a contract make a significant mistake about a fundamental aspect of the contract. This might include a mistake about the subject matter of the contract, its terms, or the identity of the parties involved. If such a mistake goes to the heart of the contract and prevents a meeting of the minds, the contract may be void.

Illegality: If the purpose or terms of the contract involve illegal activities or go against public policy, the contract is void. For example, contracts related to drug trafficking, gambling in jurisdictions where it is illegal, or agreements that promote discrimination may be considered void. Contracts that involve unlawful or illegal consideration, such as promises related to illegal activities or immoral acts, are generally void. In the example given, a promise of sex may be unlawful if it involves illegal or immoral activities. Contracts that involve illegal objects or purposes, such as drug transactions or any other illegal activities, are void because they are against the law. Contracts that promote illegal or criminal activities cannot be enforced.

Lack of consideration: For a contract to be valid, there must be consideration, which is something of value exchanged between the parties. Contracts that lack consideration on one side may be unenforceable. In other words, if one party is not receiving anything in return for their promises or obligations, the contract may be void or voidable.

Restriction of marriage: Contracts that restrict a person's right to marry or remarry may be void because they infringe on fundamental personal rights. Marriage is considered a fundamental right protected by Article 12 of the European Convention of Human Rights, and contracts that attempt to interfere with this right may not be enforceable.

Restraint of trade: Contracts that unreasonably restrict trade or competition, such as non-compete agreements, may be subject to legal scrutiny and potentially voided if the restrain of trade clause is not drafted in accordance with the law. Courts often assess the reasonableness of such restrictions to determine the validity of contract terms that restrict trade.

Restriction of legal proceedings: Agreements that seek to restrict a person's right to pursue legal remedies, such as arbitration clauses that are unconscionable or overly one-sided, may be void or unenforceable. The law typically protects individuals' access to the legal system.

Uncertainty: A contract is materially uncertain if essential elements or provisions within the contract are unclear, vague, or ambiguous to the extent that they make it difficult or impossible to determine the parties' rights, obligations, or the intended course of action. Contracts that lack clarity or specificity in essential terms may be considered void because they do not establish a clear agreement. Contracts should be specific and definite to be enforceable.

Frustration: Contracts may be considered void if they become impossible to perform due to a situation beyond the control of the parties, rendering performance objectively impossible. This situation is often referred to as frustration of purpose or impossibility of performance. For example, if a contract to paint a building is rendered impossible because the building is destroyed by a natural disaster, the contract may be void. When a contract becomes impossible to fulfil through no fault of either party, the contract may be void.

A void contract is unenforceable by law, and neither party can compel the other to perform his or her obligations under the contract. Contracts that are void are void ab initio, meaning they are void from the moment they were created because they lack essential elements required for a valid contract. Any consideration or benefits exchanged under a void contract are typically required to be returned to their original owners.