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Void and voidable contract
Arslan Akbar
Maashif
Mehboob
Rana Anees
M Ali
Ali Haider
The Meaning of which is not certain or capable
of being certain are void.
• Ambigous language
• Incomplete Document
• A covenant of partnership giving one party
the right of specifying the share of profits to
be assigned to other and affording no
indication as to the proportion of losses
which one property to bear is void for
uncertainty. AIR 1915 Lah 328 Barkat Ram
vs Anant Ram
• Agreement by way of wager are void;
and no suit shall be brought for
recovering anything alleged to be won
on any wager, or entrusted to any
person to abide by result of any game or
other uncertain event on which any
wager is made.
• Wager has been defined as contract
by A to pay money to B on the
happening of a given event, in
consideration of B paying to him
money on the eventt not happening.
• But if one of parties have events in
hand. then transaction lacks an
essential ingredient of a wager.
• Agreements collateral to wagering
agreements
• The Court below dismissed the suit as under Section 30, Contract
Act, the plaintiff was not entitled to recovor the Amount. The
plaintiff and another person entered into what was admittedly a
wagering contract with regard to cock fighting. It was agreed that
both of them should pay into the hands of the stake-holder (
defendant ) a sum of Rs. 60 on the condition that the total cum of
Rs. 120 should be paid over by the stake-holder to the person
whose cuck should win in the fight. The plaintiff case is that the
fight or match ended in a draw. On that basis he has instituted this
suit for the recovery ot the sum of Rs. 60 paid by him into the hands
of the stake-holder. The defendant pleaded that he had already paid
off to the other party 'to the contract the whole amount because it is
not true that the match or fight ended in a draw, but because in the
match or fight the cook of the other party had really won.
• No suit for recovery of money, commission etc, in
respect of void agreements.
• No suit or other proceeding shall lie for the recovery
of–
• a) any sum of money paid or payable in respect of any
agreement void under section 30, or
• (b) any commission, brokerage, fee, or reward in
respect of knowingly effecting or carrying out, or
aiding in effecting or carrying out, of any such
agreement or of any sum of money otherwise claimed
or claimable in respect thereof, or
• (c) any sum of money knowingly paid or payable on
account of any person by way of commission,
brokerage, fee, reward or other claim in respect of any
such agreement.
• In a void contract no
obligation or right
arises or accrues to
parties to the contract
from a void contract.
Such contracts are not
covered by law.
• A void contract can
give rise to no legal
liability since
transaction is nullity.
• A void contract cannot
confer any right.
• A voidable contract
continues at the option of
one party; it is the desire
of one party either to
rescind it or continue; it
is enforceable at the
option of one party and is
covered by law.
• A voidable contract
remains valid until
rescinded.
• A voidable contract
confers enforceable right
till is not essential.
• The contract becomes
void when it ceases to be
enforceable.
• A void contract cannot be
made valid by parties to
the contract by their
consent.
• Not given by any party to
another party for the
non-performance, but any
benefit received by any
party must be restored
back.
• A contract becomes
voidable only when
consent to agreement is
obtained by coercion,
undue influence fraud or
misrepresentation.
• A voidable contract can
be made valid by the
party who has a right to
rescind it by giving up his
right of rescinding it.
• Damages can be claimed
by the aggrieved party.
• Sec 2(i) voidable
contract is an agreement
which is enforceable by law at
the option of one or more of
the parties thereto, but not at
the option of the other or
others.
• Contracts entered into when one
party was a minor.
• Contracts where one party was forced
or tricked into entering it.
• Contracts entered when one party
was incapacitated (drunk, insane,
delusional).
• X says to Y, that he should sell his
new bungalow to him at a nominal
price otherwise, he will damage his
property and Y enters into a contract
due to fear. In this situation, the
contract voidable as the consent of Y
is not free, so he has the right to
avoid the performance of his part. As
well as he can claim for any damages
caused to him.
• Cooper v Phibbs (1867) LR 2 HL 149
The complainant, Mr Cooper, was the nephew
of the owner of the salmon fishery. He leased
this salmon fishery from his Uncle. When his
uncle died and the lease came up for the time
of renewal, the complainant renewed the lease
for the salmon fishery with his Aunt. However,
it was later found out that in the Uncle’s will,
Mr Cooper, had been given life tenancy of the
salmon fishery. This meant that there was no
need for the lease that existed between him
and the Aunt and the dispute arose when the
next rental payment was due.
• All agreements are contract if they
are made by the free consent of
parties….
• Consent means freedom to contract,
mutual assent as well as consensus
ad idem in relation to terms agreed
upon by parties in a contract.
1.Coercion
- Committing any act or
- threatening to commit any act
forbidden by the Penal Code or
- the unlawful detaining
- or threatening to detain any property
* To the prejudice of any person whatever,
with the intention of causing any person to
enter into an agreement
• a person to whom money has been paid or
anything delivered under coercion must
repay or return it
2. Undue influence
Definition
S. 16(1)
1) One of the parties is in a position
to dominate the will of the other
2) Uses that position to obtain an
unfair advantage over the other
Examples.
• Employer and employee
• Parents and children
• Religious adviser and follower
3. Fraud
• When one party
commits certain acts
with intent to
deceive or induce
another party to enter
into a contract.
4. Misrepresentation
• S.18- misrepresentation includes
1)The positive assertion, in a manner not warranted
by the information of the person making it, of
that which is not true, though he believes it to be
true
2)Any breach of duty which, without an intent to
deceive, gives an advantage to the person
committing it, or anyone claiming under him, by
misleading another to his prejudice, or to the
prejudice of anyone claiming under him
• 3) causing, however
innocently, a party to an
agreement to make a
mistake as to the
substance of the thing
which is the subject of the
agreement
The statement was
addressed to the party
which acted upon it
The representation must
induce the contract
What is the
difference
between fraud
and
misrepresentat
ion
Fraud – there is
intention to
deceive
Misrepresentation
– there is no
intention to
deceive
5. MISTAKE
By both
parties
(S.21)
By one
party
only
(s.23)
Mistake
as to law
(s. 22)

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Void and Voidable Contract

  • 1. Void and voidable contract Arslan Akbar Maashif Mehboob Rana Anees M Ali Ali Haider
  • 2. The Meaning of which is not certain or capable of being certain are void. • Ambigous language • Incomplete Document • A covenant of partnership giving one party the right of specifying the share of profits to be assigned to other and affording no indication as to the proportion of losses which one property to bear is void for uncertainty. AIR 1915 Lah 328 Barkat Ram vs Anant Ram
  • 3. • Agreement by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide by result of any game or other uncertain event on which any wager is made.
  • 4. • Wager has been defined as contract by A to pay money to B on the happening of a given event, in consideration of B paying to him money on the eventt not happening. • But if one of parties have events in hand. then transaction lacks an essential ingredient of a wager. • Agreements collateral to wagering agreements
  • 5. • The Court below dismissed the suit as under Section 30, Contract Act, the plaintiff was not entitled to recovor the Amount. The plaintiff and another person entered into what was admittedly a wagering contract with regard to cock fighting. It was agreed that both of them should pay into the hands of the stake-holder ( defendant ) a sum of Rs. 60 on the condition that the total cum of Rs. 120 should be paid over by the stake-holder to the person whose cuck should win in the fight. The plaintiff case is that the fight or match ended in a draw. On that basis he has instituted this suit for the recovery ot the sum of Rs. 60 paid by him into the hands of the stake-holder. The defendant pleaded that he had already paid off to the other party 'to the contract the whole amount because it is not true that the match or fight ended in a draw, but because in the match or fight the cook of the other party had really won.
  • 6. • No suit for recovery of money, commission etc, in respect of void agreements. • No suit or other proceeding shall lie for the recovery of– • a) any sum of money paid or payable in respect of any agreement void under section 30, or • (b) any commission, brokerage, fee, or reward in respect of knowingly effecting or carrying out, or aiding in effecting or carrying out, of any such agreement or of any sum of money otherwise claimed or claimable in respect thereof, or • (c) any sum of money knowingly paid or payable on account of any person by way of commission, brokerage, fee, reward or other claim in respect of any such agreement.
  • 7. • In a void contract no obligation or right arises or accrues to parties to the contract from a void contract. Such contracts are not covered by law. • A void contract can give rise to no legal liability since transaction is nullity. • A void contract cannot confer any right. • A voidable contract continues at the option of one party; it is the desire of one party either to rescind it or continue; it is enforceable at the option of one party and is covered by law. • A voidable contract remains valid until rescinded. • A voidable contract confers enforceable right till is not essential.
  • 8. • The contract becomes void when it ceases to be enforceable. • A void contract cannot be made valid by parties to the contract by their consent. • Not given by any party to another party for the non-performance, but any benefit received by any party must be restored back. • A contract becomes voidable only when consent to agreement is obtained by coercion, undue influence fraud or misrepresentation. • A voidable contract can be made valid by the party who has a right to rescind it by giving up his right of rescinding it. • Damages can be claimed by the aggrieved party.
  • 9.
  • 10. • Sec 2(i) voidable contract is an agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others.
  • 11. • Contracts entered into when one party was a minor. • Contracts where one party was forced or tricked into entering it. • Contracts entered when one party was incapacitated (drunk, insane, delusional).
  • 12. • X says to Y, that he should sell his new bungalow to him at a nominal price otherwise, he will damage his property and Y enters into a contract due to fear. In this situation, the contract voidable as the consent of Y is not free, so he has the right to avoid the performance of his part. As well as he can claim for any damages caused to him.
  • 13. • Cooper v Phibbs (1867) LR 2 HL 149 The complainant, Mr Cooper, was the nephew of the owner of the salmon fishery. He leased this salmon fishery from his Uncle. When his uncle died and the lease came up for the time of renewal, the complainant renewed the lease for the salmon fishery with his Aunt. However, it was later found out that in the Uncle’s will, Mr Cooper, had been given life tenancy of the salmon fishery. This meant that there was no need for the lease that existed between him and the Aunt and the dispute arose when the next rental payment was due.
  • 14. • All agreements are contract if they are made by the free consent of parties…. • Consent means freedom to contract, mutual assent as well as consensus ad idem in relation to terms agreed upon by parties in a contract.
  • 15.
  • 16. 1.Coercion - Committing any act or - threatening to commit any act forbidden by the Penal Code or - the unlawful detaining - or threatening to detain any property * To the prejudice of any person whatever, with the intention of causing any person to enter into an agreement • a person to whom money has been paid or anything delivered under coercion must repay or return it
  • 17. 2. Undue influence Definition S. 16(1) 1) One of the parties is in a position to dominate the will of the other 2) Uses that position to obtain an unfair advantage over the other Examples. • Employer and employee • Parents and children • Religious adviser and follower
  • 18. 3. Fraud • When one party commits certain acts with intent to deceive or induce another party to enter into a contract.
  • 19. 4. Misrepresentation • S.18- misrepresentation includes 1)The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true 2)Any breach of duty which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him
  • 20. • 3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement The statement was addressed to the party which acted upon it The representation must induce the contract
  • 21. What is the difference between fraud and misrepresentat ion Fraud – there is intention to deceive Misrepresentation – there is no intention to deceive
  • 22. 5. MISTAKE By both parties (S.21) By one party only (s.23) Mistake as to law (s. 22)