Understanding the difference between a void agreement and a voidable agreement is critical for any business owner or legal professional. The two concepts may sound similar, but they have distinct differences that are crucial to understand when entering into any legal contract.
To begin, a void agreement is an agreement that has no legal effect from the start, and it is not enforceable by either party. A void agreement is considered invalid from the outset because it violates the law or public policy. For example, an agreement to commit a crime or an agreement that is against public policy is void from the beginning. In such a scenario, the court will never enforce or recognize the agreement.
On the other hand, a voidable agreement is a contract that is initially considered valid, but one or both parties have the power to void, cancel, or rescind the agreement. A voidable agreement becomes void upon the request of one of the parties, and there is the potential for a legal battle if one party does not agree with the other party`s request to void the agreement. This typically occurs when one of the parties did not fully understand the terms of the agreement or was coerced into entering into the agreement.
For example, if a person was under duress or was misled when agreeing to the terms of the contract, they may have the right to void the agreement. This may occur when a party was not fully informed or had limited mental capacity, making it difficult to understand what they were agreeing to at the time.
It is critical to note that while a voidable agreement is initially valid, it may become void if one of the parties voids the agreement. In contrast, a void agreement is always considered void from the beginning and cannot be enforced in court.
In conclusion, understanding the difference between a void agreement and a voidable agreement is critical for any business owner, legal professional, or individual entering into a legal contract. A void agreement is invalid from the start because it violates the law, while a voidable agreement is initially valid but can be canceled if one of the parties requests it. Knowing the difference can help protect your rights and ensure that you are not held responsible for an agreement that is not enforceable by law.