Void Agreement Definition: Everything You Need to Know
A void agreement definition would be an agreement with no legal value. Legally, a void agreement means the contract or agreement is no longer enforceable.3 min read
A void agreement definition would be an agreement or contrac with no legal value. Legally, a void agreement means the contract or agreement is no longer enforceable. While precise definitions vary by jurisdiction, void agreements are generally categorized as being void from the beginning and were never valid at any point. On the other hand, void contracts are generally defined to have been valid at one time, but are now invalid. However, despite those precise definitions existing, the terms are most often used interchangeably.
A Void Agreement Never Valid
An agreement that was void from the beginning is said to be ab-initio. In order to be valid, the agreement must contain all of the elements listed in the Indian Contract Act of 1872, Section 10. Ab-initio agreements violated the Indian Contract Act from the beginning and are not valid. Examples of an agreement that would never be valid include those that:
- Cannot be executed, such as a street vendor selling the Brooklyn Bridge to a tourist
- Were made without consideration
- Require breaking the law
- Go against current public policy
- Include a party that is a minor, intoxicated, or legally insane at the time of signing
Essentially these agreements have no legal effects and in the eyes of the law they never existed.
A Void Contract Once Valid But No Longer
A void contract is a contract or agreement that ceases to have a legal effect. Unlike an ab-initio, these contracts did at one point contain the elements listed in the Indian Contract Act, and therefore at least initially are considered valid legal agreements binding to both parties. A few ways a contract could become legally void are:
- The contract becomes impossible to fulfill due to external circumstances
- Laws change since the initial agreement, and the agreement now requires breaking the law
- Fulfilling the contract will result in something unlawful
- The contract was contingent on circumstances that cannot come to pass
- One party failed to disclose key information or provided inaccurate information
Technically speaking, a fulfilled contract is also a void contract, as the parties involved are no longer bound by the contract and therefore it has no legal effect.
Examples of Void Agreements
The most straightforward type of void agreement is one that requires breaking the law. A gang of thieves may make an agreement to steal a valuable painting and split the proceeds evenly. But if one party in the agreement does not receive a fair share, he cannot take the others to court for not fulfilling the contract, since the contract is considered legally void.
A common example of a void contract is one in which a performer agrees to a set of shows, but then becomes injured and cannot perform after all. In these circumstances, the contract was valid initially, but is now impossible to fulfill.
Agreements Void Through Uncertainty
Another way agreements can be void is through uncertainty. If an agreement is uncertain in meaning, and cannot be clarified through legal or business proceedings, the agreement is void. Part of what makes a legally binding contract is the obligation being clear and therefore able to be fulfilled. If the language used cannot be interpreted by the parties involved or a third party, the contract has no legal effect.
An example of a void agreement through uncertainty is one that is vaguely worded: "X agrees to purchase fruit from Y." If there is no way to determine which type of fruit was agreed upon or intended, then the agreement is void. However, if party Y in the above agreement is a grapefruit farmer, then there is a clear indication of what type of fruit was intended and X would still be liable to make the purchase.
Void Agreements in the Future
Agreements that do not currently exist but are agreed to potentially exist in the future are also legally void, unless all items in the agreement are actually agreed. As an example: if X agrees to purchase grapefruit from Y at a price to be determined by market value at date C, then the market value at date C can be made certain. However, an agreement for X to purchase some kind of fruit from Y at some point in the future at a price to be determined would both be uncertain and entirely in the future, thus void.
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