Void Agreement

Void Agreement

Void agreements are those agreements which are not enforced by law courts. Section 2(g) of the Indian Contract Act defines a void agreement as, “an agreement not enforceable by law”. Legally, a void agreement means the contract or agreement is no longer enforceable.

Thus the parties to the contract do not get any legal redress in the case of void agreements. Void agreements arise due to the non-fulfillment of one or more conditions laid down by Section 10 of the Indian Contract Act. This Section states as follows:

All agreements are contracts if they are made with the free consent of parties competent to contract, for a lawful, consideration and with a lawful object, and are not hereby expressly declared to be void.

The basic principles for a Contract to be valid are as follows:

  • There should be 2 or more parties to a Contract.
  • They should be legally capable of signing the Contract. (above legal age, of sound mind etc)
  • There should be an exchange of goods or services.
  • The Contract should be for a legal purpose.

Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.

From the above, it is quite clear that non-fulfillment of any of these conditions by one of the parties to a contract shall make an agreement void. These conditions being:-

  • Free consent of the parties;
  • Competency of the parties to contract;
  • The existence of a lawful consideration;
  • The existence of a lawful object;
  • An agreement is not included in the list of those specially declared to be void by the Indian Contract Act by its Section 26; 27, 28, 29, 30, and 56;
  • Completion of certain formalities required by any other law of the country like transfer of Property, Act, Company Act, etc.