5 Void, Voidable or Discharged Contracts

2.
5 Void, Voidable or Discharged Contracts
Void Contracts
• A void contract is one that breaks the law and

was never intended to be enforced in the first
place.
• A void contract is a formal agreement that is
effectively illegitimate (not authorized by the
law) and unenforceable from the moment it is
created.
• Void contracts can include ones that involve an
illegal subject in the contract or a contract that
is so unfair and unconscionable to public
policy.
• In such instances, void contracts (also referred

to as "void agreements"), involve agreements
that are either illegal in nature or inviolation of
fairness or public policy.
• A void contract is a formal agreement that is
effectively illegitimate and unenforceable
from the moment it is created.
• Any contract agreement created between two
parties for illegal actions is also considered a
void contract.
• A void contract is no longer considered a

contract at all. Since it has lost its status as a
contract, it is unenforceable and has no binding
legal effect.
• For example, a contract between an illegal

drug supplier and a drug dealer is
unenforceable from the onset due to the
illegal nature of the agreed-upon activity
• Examples of void contracts could include
prostitution or gambling.
Voidable Contract
A voidable contract is one that was initially

deemed lawful by the parties but is later deemed
unenforceable against one of the parties due to
valid legal grounds.
Voidable Contract is the contract which can be

enforceable only at the option of one of the two
parties to the contract. In this type of contract, one
party is legally authorized to make a decision to
perform or not to perform his part. The aggrieved
party is independent to choose the action. The right
may arise because the consent of the concerned
party is influenced by coercion, undue influence,
fraud or misrepresentation, etc.
The contract becomes valid until the aggrieved
party does not cancel it. Moreover, the aggrieved
party has the right to claim damages from the other
party. Normally, following reasons make any
contract as a voidable:
 Failure by one or both parties to disclose a

material fact
 A mistake, misrepresentation, or fraud
 Undue influence or duress
 One party's legal incapacity to enter a
contract (Example... a minor)
 One or more terms that are unconscionable
(not right or reasonable)
 A breach of contract
For example,
X says to Y, that he should sell his new

bungalow to him at a nominal price
otherwise, he will damage his property and
Y enters into a contract due to fear. In this
situation, the contract voidable as the
consent of Y is not free, so he has the right
to avoid the performance of his part. As
well as he can claim for any damages
caused to him.
Discharge of a Contract
The discharge of a contract means that the

obligations of the contract come to an end. When
discharge occurs, all duties which arose under the
contract are terminated.
The discharge of a contract is characterized as the

end of an agreement or an arrangement made by a
couple of parties, which results in the failure in
performing or playing out the obligations
referenced at the hour of making a contract with
the acknowledgment of all the parties with free
consent. Subsequently, the commitments might be
legal or contractual or performance, or even
operational.
Different Methods: Discharge of contract
Discharge of contract by breach of

contract:
Breach of contract is concerned with the
termination of the original contract due to the
failure of performing obligations by either or all of
the parties, which discourages each of the other
parties. It relates to void or terminating the original
contract completely. These breaches of contracts
may be either anticipatory or actual.
Discharge of contract by accord and

satisfaction:
Accord is an executor contract that helps to

perform the existing duties at present to avoid the
contractual discharge. On the other hand, based on
the performance of the accord, the satisfaction of a
contract will be considered, and one doesn’t want
to void the entire contract.
Discharge of contract by the impossibility of

performance:
In this case, the discharge of the contract happens

without any interference from both of the parties.
Despite the fact that everything is acceptable at the
place of pain, certain unexpected and
undetermined issues might occur, which decreases
the chance of playing out or performing a contract.
This includes a downturn for the market,
catastrophic events, absence of legitimate reason,
unfortunate episodes, and so on. In the Indian
Contract Act, segment 59 plainly clarifies that
assuming any of the reasons might prompt the
difficulty of execution, and it is prudent to break
the agreement.
Discharge of contract by lapse of time:
It is indicated that in case if the agreement can’t be

performed within the predetermined period, it
might influence the other party and lead to the
abrogation of the whole agreement. Then, at that
point, it is treated as a contractual discharge of the
agreement by a time-lapse.
Discharge of contract by agreement:
If both of the individuals or parties in the

agreement aren’t willing to proceed with the
agreement till the due date, then it is changed over
to the next party, whether or not they might
acknowledge the discharge of the agreement or
contract by the understanding will occur.
However, it happens in different circumstances.
They are as follows:
A: Waiver: Waiver refers to the abandonment

of right. In case any of the parties surrender
their rights from the contract, which affects the
other party, then it leads to thedischarge of the
contract by substitute agreement.
B: Alteration: It is another situation where the
particulars of the agreement or contract will be
changed either partially or totally with the
assent of the two parties.
Be that as it may, the parties will not change,
and they can appreciate new advantages,
possibly they may less or more than the old
agreement or contract.
C: Rescission: Here, both the parties agreed to

modify certain rules and regulations in the
contract with mutual understanding. It may
lead to the cancellation of all the rulesor may
cancel partially.
D: Novation: Specifying the substitution of

either a new contract in the place of the original
contract or new members in the place of the old
one, whether it may be a singleperson or both
the parties, is known as novation, which is a
part of the contractual discharge by
substitution of agreement.
The major differences between void contract and

voidable contract are:
A contract which lacks enforceability is Void

Contract.
A contract which lacks the free will of one of the

parties to the contract is known as Voidable
Contract.
A void contract was valid at the time when it is

created, but later on, it becomes invalid.
Conversely, the voidable contract is valid until the
aggrieved party does not revoke it within stipulated
time.
When it is impossible, for an act to be performed
by the parties, it becomes void, as it ceases its
enforceability.
When the consent of the parties to the contract

is not free, the contractbecomes voidable at the
option of the party whose consent is not free.
In void contract, no party can claim any damages
for the non-performance of the contract.

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2.

5 Void, Voidable or Discharged Contracts

• A void contract is one that breaks the law and

• In such instances, void contracts (also referred

• A void contract is no longer considered a

• For example, a contract between an illegal

A voidable contract is one that was initially

Voidable Contract is the contract which can be

 Failure by one or both parties to disclose a

X says to Y, that he should sell his new

The discharge of a contract means that the

The discharge of a contract is characterized as the

Different Methods: Discharge of contract

Discharge of contract by breach of

Discharge of contract by accord and

Accord is an executor contract that helps to

Discharge of contract by the impossibility of

In this case, the discharge of the contract happens

Discharge of contract by lapse of time:

It is indicated that in case if the agreement can’t be

If both of the individuals or parties in the

A: Waiver: Waiver refers to the abandonment

C: Rescission: Here, both the parties agreed to

D: Novation: Specifying the substitution of

The major differences between void contract and

A contract which lacks enforceability is Void

A contract which lacks the free will of one of the

A void contract was valid at the time when it is

When the consent of the parties to the contract

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