Sunday, January 17, 2010

DIFFERENCE BETWEEN VOID AGREEMENT AND VOID CONTRACT

DIFFERENCE BETWEEN VOID AGREEMENT AND VOID CONTRACT
The difference between void agreement and void contract are as under:


Void Agreement :

1. A void agreement is unenforceable from the beginning.

2. A void agreement can never be enforced.

3. In a void agreement the parties are not entitled for restoration of benefits which they have exchange during the contract.

Void Contract :

1. A void contract is enforceable when it is made. It becomes unenforceable later on.

2. A void contract can be enforced before it becomes unenforceable.

3. In a void contract the parties are entitled for restoration of benefits which they have exchange during the contract.

DIFFERENCE BETWEEN ILLEGAL AND VOID AGREEMENT
The following are the points of difference between the two.

Illegal Agreement :

1. Prohibited :

An illegal agreement is prohibited by law.

2. Punishable :

An illegal agreement is punishable.

3. Nature :

An illegal agreement is also void agreement.

4. Object :

The object of illegal agreement is illegal.

5. Collateral Agreement :

A collateral agreement to an illegal agreement is not enforceable.

6. Restoration Of Benefit :

In illegal agreement the money paid cannot be claimed back.

Void Agreement :

1. A void agreement is not prohibited by law.

2. A void agreement is not punishable.

3. A void agreement is not illegal agreement.

4. The object of void agreement is not illegal.

5. A collateral agreement to a void agreement is enforceable.

6. In void agreement the money received must be returned to the other party.

Collateral Agreement :

When an agreement is illegal, other agreement which is collateral to it is also illegal and so not enforceable by law.

EXAMPLES :

A borrows Rs. 2 lac from B to buy a car from X for bomb blast. B knows the purpose of the loan. An agreement between A and B is collateral to the agreement with X so it is also void agreement.

DIFFERENCE BETWEEN VOID AGREEMENT AND VOIDABLE CONTRACT

The following are the points of difference between the two.

Void agreement :

1. Enforceability :

A void agreement is unenforceable at law.

2. Defects :

A void agreement is void ab-initio and its defects cannot be removed.

3. Rights Of Third Party :

In a void agreement a third party does not acquire any rights.

4. Compensation :

In a void agreement the person is not entitled to compensation for loss arising due to non performance of the agreement.

Collateral Agreement :

A collateral agreement to void agreement is a void contract.

6. Lapse Of Time :

It can never become a void contract on the expiry of reasonable time.

7. Free Consent :

It is void due to lack of any essentials of a valid contract except free consent.

Voidable Contract :

1. A voidable contract is a valid contract till it is rejected.

2. A voidable contract is not void ab-initio and its defects can be removed.

3. In a voidable contract a third party who buys goods in good faith and for consideration before the contract is rejected, acquires rights.

4. In a voidable contract, a person is entitled to compensation for loss arising due to non performance of the contract.

5. A collateral agreement to a voidable contract is not a void contract.

6. It may become a valid contract if the aggrieved party does not reject it within a reasonable time.

7. It is voidable because the consent of a party is not free.

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