Void and Voidable Contract
- Restitution – If any benefit is passed between the parties, it may be restored back.
- Definition – When a contract ceases to be enforceable at law, it becomes void contract. A Voidable contract is a contract which is enforceable by law at the option of one or more parties thereof, but not at the option of others.
- Status – A void contract cannot create any legal rights. It is a total nullity. A voidable contract takes its full and proper legal effect unless it is disputed and set aside by the person entitled to do so.
- Nature – A void contract is valid when it is made. But subsequently it becomes void due to one reason or the other. A contract may be voidable since very beginning, or may subsequently become voidable.
- Rights – A void contract is valid when it is made. But subsequently it becomes void due to one reason or the other. A voidable contract gives rights to the aggrieved party to rescind the contract, and claim the damages, etc. in certain cases.
- Effect – When a contract is void because of illegality, its collateral transactions also becomes void. A voidable contract does not effect the collateral transactions.