Voidable Contracts: An Analysis
- IJLLR Journal
- Mar 18
- 2 min read
Aditya Goswami, Institute of Integrated Learning in Management (IILM) Greater Noida
Introduction
In today’s world contracts are an integral part of our daily lives. Even simple luxuries like having food in a restaurant, using cabs, and many more involve contracts. From the business point of view contracts are important in determining the commitments of the parties thereby establishing a legal relationship between them. This helps to mitigate risks and resolve disputes in the future. Contracts maintain compliance of the company with its shareholders and customers. These agreements between the parties help generate revenue and profit increasing efficiency and brand value. Therefore, it becomes important to understand the difference between void and voidable contracts. As per Section 2(g) of the Indian Contract Act, 1872 defines a void agreement as an agreement not enforceable by law. In the case of Marbury v. Madison1 the Chief Justice Marshall laid the theory of Void Ab Initio (void from the start). On the other hand, in the leading case of Mohiri Bibi v. Dharmodar das Ghose2, the court laid the concept of voidable contract. Therefore, a contract as per Section 2(h) Indian Contract Act, 18723 is an agreement enforceable by law. Moreover, a contract can be broadly classified into void contracts that are void since the beginning and voidable contracts that later become a void contract. With the advent of Globalization and Artificial Intelligence (AI), the concept of contracts has become very crucial to understand. Even though AI has improved efficiency in business and reduced the possibility of errors, however, such technology can also be used to do bad more than good of the people. Hence it becomes important for not only law students, scholars and practitioners but also the layman to understand the situations when they can approach the court to get a contract to be declared void and claim some compensation. There are many ways in which a party becomes a part of a contract, some ways include coercion, fraud, misrepresentation, undue influence and mistake. A contract can he made void by one party on the above grounds. On the other hand, contracts that involve a minor, person of unsound mind or a person who is disqualified by law because of either being a criminal in jail or being subject to an actionable claim.
