Before knowing about the meaning and implications of a Void contract we

should have an idea about a Contract.

Contract
Section 2(h) of the Act defines the term contract "as an agreement enforceable by law".

In other words a contract is a binding agreement between two or more parties for
performing, or refraining from performing, some specified act(s)
in exchange for lawful consideration.

Now we shall be having a better idea about Void contract after understanding contract.

Definition of Void Contract

VOID CONTRACT - A contract which ceases to be enforceable by law becomes

void when it ceases to be enforceable. [section 2(j)]. - - Thus, initially a contract cannot
be void, i.e. a contract cannot be void ab initio. The simple reason is that in such a case,
it is not a contract at all to begin with. Hence, only a valid contract can become void
contract due to some subsequent events. e.g. the person dies or property is destroyed
or Government imposes a ban etc. - - A void agreement is void ab initio. It never
becomes a contract. It is nullity and cannot create any legal rights.

Void agreements - An agreement not enforceable by law is said to be void. [Section

2(g)]. One should note that it is not ‘void contract’, as an agreement which is not
enforceable by law does not become ‘contract’ at all.

An agreement not enforceable by law is void bonito but a contract which cease to be
enforceable by la become void hen it cease to be enforceable.

A contract becomes void when, by reason of some event which the promissory could not
prevent the performance of the contract become impossible. The impossibility must
happen after the formation of the contract.

For an example, a And b contract to marry each other. Before the time fixed for the
marriage, a goes mad. The contract becomes void.
A contract also becomes void by reason of subsequent illegality.
For another Example, A in England agree to supply good to B in Germany. After the
formation of the contract war breaks out between England and Germany. And the
supply of goods to Germany I prohibited by legislation. The contract
becomes void.

A Contingent contract to do or not to do anything if an uncertain future even happens

becomes void if the event become impossible.

Capacities of Parties:

In general every person is presumed by law to be competent to contract and

anyone claiming exemption from liability on the ground of incapacity to contract must
strictly prove it. In capacity to contract may arise out of (a) mental deficiency or (b)
status. Minor lunatic, idiot and drunken person fall under (a) and foreign sovereign,
ambassador, alien enemies, Professional people, corporation and married women under
(b).

Following are the conditions on which an agreement is termed as void:

• 1. Agreement in restraint of marriage: sec. 26

• 2. Agreement in restraint of trade [sec. 27]

– Herbert Morris Ltd Saxelby 1916

– Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co 1894

– Gujarat Bottling Co v Coca Cola Company Air 1995 SC 2372

• Exception to an agreement in restraint of trade

– 1. Sale of Good will

– 2. Exception under Indian Partnership Act

 – 3. Restraint by a contract of service [employment]

• 3. Trade combinations

– Sheikh Kalu v Ram Sharan Bhagat 1909 13 CNN 388

• 4. Agreement in restraint of legal proceedings: sec. 28

– Ghose v Reliance Insurance Co 1934

• 5. Wagering Contracts

• 6. Agreement by a minor or a person of unsound mind.

• 7. Agreement of which the consideration or object is unlawful

- 1. It is forbidden by law

- Universal Plast Ltd v Santosh Kumar AIR 1985

- 2. Defeat the provision of any law

- Ram Sewak v Ram AIR 1962 All 177 -Abdul Piojkhan Nabab v Hussenbi
1904

- 3. Injurious to person or property

- Gurmukh Singh v Amar Singh 1991 2 SCC 79

- 4. Agreement Injurious to public policy

- Sukha v Ninni AIR 1966 - Punnakotiah v Kallapalli Kolikamba AIR 1967 AP

--- Mewa Ram v Ram Gopal ILR 1926

- 5. Immoral

- Pearce v Brooks 1866-- Bai Viji v Nansa Nagar 1885 ----Narayani v Pyare
Mohan AIR 1927

- 6. Agreement opposed to public policy Sec. 23

 - Trading with an enemy

- Trafficking in public offices

- Interference with the administration of justice

• 8. Agreement made under a bilateral mistake of fact material to the agreement

• 9. Agreement of which the consideration or object is unlawful in part and the

illegal part can not be separated from the legal part

• 10. Agreement made without consideration.

• 11. Agreements the meaning of which is uncertain

• 12. Agreements to do impossible acts

Thus this gives us a fair idea on what is Void contract and Void agreement are all about.