Void Contracts
BUSSINESS LAW

VOID CONTRACTS | ESSENTIALS OF VOID CONTRACTS


What are Void Contracts? An agreement which is not enforceable by law is said to void. These are the agreements which do not create a legal relationship in between the contracting parties. In the eyes of law, a void agreements are not actually agreements and they are void ab-initio (from the very beginning).  Let’s discuss in detail essentials of void contracts.

ESSENTIALS OF VOID CONTRACTS

The agreements which have been declared by law as Void Contracts are as follows:

1.         Mistable of Both the Parties:
According to The Contract Act, where both the contracting parties are at mistable as to a matter of fact essential to an agreement or as to law not enforceable in Pakistan (Foreign law), the agreement is said to be void.
Illustration: A sells his horse to B. But horse was dead at the time of bargaining and neither of the parties was aware of this fact. The contract is void
2.         Agreement without consideration:
According to section 25 of The Contract Act, an agreement made without consideration is void unless it is in writing and registered or is a Promise to compensate for something already done or is a promise to pay a debt barred by limitation law.
Illustration: A Promises, for no consideration, to give Rs 1000 to B This is a void contract.
3.         Unlawful Consideration:
According to The Contract Act, when the whole of the consideration for a promise or Its part IS unlawful. the contract Will become void and Illegal.
Illustration: A promises to pay B Rs.100,000 If he gives A, a job in Government department B agrees. It is a void agreement because the consideration is
4.         Unlawful Object:
When whole or a part of the object of a contract is unlawful, the contract will become void and illegal.
Illustration: A promises B to pay Rs.100,000 if he puts fire to the property of C.  B agrees this agreement is also void because of an unlawful object.
5.         An Agreement in Restraint of Marriage:
According to the section 26 of The Contract Act, any agreement of marriage of any person other than a minor is void.
Illustration: A promises to B to pay Re 100,000 if he does not marry to C, B agrees. It is also a void agreement.
6.         An Agreement in Restraint of Trade:
Every agreement by which anyone is restrained from doing a “lawful profession, trade or business of any kind is to that extent void. Sect 27.
Illustration: A agrees to pay Rs.100,000 to B if he does not start a business in his competition. B agrees. It is a void contracts as declared by law.
7.         Agreement in Restraint of legal Proceeding:
Every agreement, by which any party thereto is restricted absolutely from enforcing Its rights under or in respect of any contract, by the usual legal proceedings In the ordinary tribunals void to that extent sec 28 It means, when a party enters into a contract, not to take any legal action for the restore of his nights against him, void.
Illustration: A employees B on the condition that he will have no right to take legal action against him for his rights. B agrees. It is void agreement and B cannot be restrained from taking legal action against A.
8.         Agreement Involving Uncertainty:
Agreements, the meaning of which is not certain or capable of being made certain are void Sec 29 It means that when there is an agreement In between two parties but the subject matter is uncertain and it cannot be made certain is void because it cannot be performed.
Illustration: A agrees to sell B a hundred tons of oil, but there is nothing mentioned what kind of oil was Intended. The agreement is void for uncertainty.
9.         Agreement by way of wager:
Agreements by way of wager are void and no suit shall be brought for recovering anything alleged to be one on any wager or entrusted to any person to abide the result of any game or other uncertain events on which any wager is made (sec. 30)

Illustration: A race is held between black and a white horse. X and Y two parties enter into an agreement about this race that I  white horse wins the race X Will pay Rs.10000 to Y and vice versa. This contract is a wagering one and is void contracts.
10.       Agreements collateral to Wagering contract:  
According to section 30(a), all agreements knowingly made to assist the entering, effecting or carrying out or to secure or guarantee the Performance of wagering contracts are also void.
Illustration: In a race of two horses, A agrees to pay RsM0000 to B if white   Wins the race and vice versa, C gives a guarantee of A and D gives a guarantee of B, The contracts by which guarantee has been given by C and D are also void because they support a wagering contract.
11.       Agreements to do Impossible Acts:
An agreement to do something, the performance of which is Impossible is void.

Examples: A contract to put alive a dead body is void because it is not possible for anyone to put alive a dead body. Similarly, a contract to pay Rs.1000 if two parallel lines across each other are also void contracts.
12.       Agreements made with a minor:
As a minor is not competent to make a valid contract, so any contract made with the minor is void and not performable. But this thing should be kept in mind that a contract to provide necessities of life to a minor is valid and is an exception to the general rule.
Illustration: A enters into an agreement with B to purchase the property of B who is a minor is a void contract and is not enforceable by law.
13.       Agreement by unsound mind;
It is necessary that all the contracting parties must be of sound mind, A contract with a person who is permanent of unsound mind is a void and is not enforceable by law.

Illustration:
A who is a major and is a sound mind enters into this an agreement with B who is of unsound mind at the time of a contract this contract is void and not enforceable by law.