A void contract has no legal effect from the start, so neither party can enforce it. A voidable contract is valid and binding until the wronged party chooses to cancel it. The difference decides what you can recover. Under English law, contracts are usually void for illegality, lack of capacity or fundamental uncertainty, and voidable for misrepresentation, duress or undue influence. Rescission lets a wronged party unwind a voidable contract, but it can be lost through delay, affirmation or third party rights. Even where a contract is void or illegal, you may still recover money or property, or claim compensation, depending on the circumstances. This article will explain the legal implications of void and voidable contracts and outline the remedies available.<\/p>\n\n\n\n
A void contract<\/a> creates no rights or obligations whatsoever. You cannot enforce it through legal action. This means you cannot claim damages for breach of its terms. More significantly, a void contract cannot transfer ownership of property, even to an innocent third party.<\/p>\n\n\n\n However, you are not necessarily left without recourse. Your dealings under the void contract may give rise to other remedies. For example, you might have claims for negligence or fraud. Alternatively, you may be able to recover money or property you transferred under the void agreement.<\/p>\n\n\n\n A voidable contract<\/a> presents different implications. Unlike a void contract, it is initially valid and binding. This means it creates enforceable rights and obligations. However, if you are the wronged party, you can cancel it.<\/p>\n\n\n\n You can either rescind the agreement<\/a> or continue with it once you discover the grounds for cancellation. This choice must be made within a reasonable time. You can lose the right to cancel through delay. Once you make your choice, you cannot change your mind.<\/p>\n\n\n\n Cancelling works retrospectively. This means the rights and obligations are treated as if they never existed. Both parties must return the benefits they have received. However, you might lose the right to cancel in certain circumstances, such as if it is impossible to restore both parties to their original positions, if too much time passes, or if cancellation would interfere with third party rights.<\/p>\n\n\n\n Key Statistics<\/strong><\/p>\n Sources<\/strong><\/p>\nUnderstanding Voidable Contracts<\/h2>\n\n\n\n
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