View random article

What Is a Void Contract?

A contract is a legal agreement that is binding onto the parties who have agreed to an exchange. When some aspects of a contract can no longer be enforce or are by no means legal, then it is possible for a contract to be rendered null and void from the beginning. Such contracts are referred to as void contracts.


A void contract is different from a voidable contract in that the former was never enforceable to begin with while the latter could be voided later on. Since a void contract was never legally binding from the start, a part who has entered into such a contract is not legally obligated to fulfill the terms and conditions stipulated.


A contract can become a void contract if some form of illegal activity is involved. It is not possible for people to be legally obligated to commit an illegal act. For example, a drug cartel and individual drug dealers enter into a void contract since the contract involves the transaction of illegal drugs. A void contract can also exist if the language used or terms stipulated cannot be performed by the parties involved. For example, a person enters into a void contract with a deceased individual since the deceased cannot fulfill whatever conditions were placed in the contract and did not give any form of consent.


A void contract provides no legal obligations for parties involved, but a voidable contract can still hold involved parties into performing the terms and conditions during the period that the contract is still valid.

Featured in Finance