What Causes a Contract to Be Null and Void?

What you’ll discover:

What makes a contract legally binding?
What causes a contract to be void?
What distinguishes a voidable contract from a null and void contract?
Can a contract be declared invalid by mutual agreement?
Receive competent legal advice for your contractual requirements.

When you sign a contract, you agree to its terms and are legally bound to uphold them if the contract is legitimate. A contract, on the other hand, may be declared null and invalid after it is signed, implying that it was never enforceable. Whether you’re an ordinary consumer or a company owner or manager who often engages into contractual agreements, it’s vital to understand what might render a contract null and invalid.

In this section, we will look at the components of a valid contract, the conditions that render a contract null and invalid, and how they vary from a voidable contract.

What makes a contract legally binding?

A contract is, in general, an agreement between two or more entities that establishes a legally enforceable commitment to do something. A legitimate contract must have the following elements:

This comprises all of the contract’s provisions, most notably the offer and acceptance. For example, Brakes Express promises to repair Kimi’s brake pads by 3:00 PM today for $150, which Kimi agrees by signing the contract.
Consideration. This is the purpose for the contract, or the value received by each side. Janelle, for example, offers to purchase Eric’s signed Prince picture for $500. In this situation, the consideration provided for the poster is $500, and the poster is the consideration given for the $500.
Capacity. If you have the ability to enter into a contract, it indicates you are of sound mind, of legal age (18 in most places), and have the authorization to enter into a specific arrangement.

What causes a contract to be void?

The phrase “null and void” in contract law signifies that the contract was never legal. As a result, the contract has no legal force. This is not the same as having a contract declared void. Contracts may be regarded null and invalid for a variety of reasons, most notably the absence of one or more of the criteria described above. Some of the most prevalent explanations are as follows:

The contract’s subject matter is prohibited. For example, if you sign a contract to launder money for an organized criminal syndicate and the other party breaks its conditions, you have no legal redress since the agreement’s subject matter was illegal.
The terms are ambiguous or hard to meet. If you made a contract to provide a restaurant with a particular number of fresh abalone, but you are unable to fulfill your duty since an abalone harvesting restriction was later enacted. In this instance, the contract may be deemed null and unenforceable since fulfilling your commitment has become impossible.
Inattention to detail. The contract must have a defined aim in which the parties engage in some form of trade. You cannot, for example, contractually promise to perform something you have previously done (called a “past consideration”) or something you are legally compelled to do.
Fraud. A contract may be declared void if one party induced the other party to sign it by lying or concealing material information. For example, if Craig poses as a plumber but has no plumbing knowledge, the contract he entered into with Aaron to manually replace all of the old pipes in Aaron’s home might be found invalid owing to fraud.

What distinguishes a voidable contract from a null and void contract?

A contract that is null and void is regarded dead on arrival since it was never legitimate. A voidable contract, on the other hand, may be regarded legal if both parties agree to continue. Janelle, for example, offers to purchase Eric’s signed picture of Prince, but upon closer investigation, both she and Eric learn that the signature belongs to Sheila E, not Prince. Janelle has the option of canceling the contract due to Eric’s incorrect notion that Prince signed the poster, but she chooses to go forward with the arrangement nevertheless since she is an even larger admirer of Sheila E. Even though the contract is voidable due to the error, it is considered legitimate and enforceable since Janelle consented to the agreement despite the error.

Other reasons a contract may be deemed voidable include:

Unfair influence or coercion
Information withheld or misrepresented
Contractual breach by one or more parties
One or more parties are unable to engage into the contract.

Can a contract be declared invalid by mutual agreement?

If both parties choose to withdraw from the arrangement, they may do so by signing a Mutual Rescission and Release Agreement. The Mutual Rescission and Release Agreement nullifies the original contract and returns the parties to their previous positions before to entering into that initial agreement.

Receive competent legal advice for your contractual requirements.

When entering into a legally binding agreement, it is essential to exercise caution and pay close attention to the specifics. Signing a contract that is subsequently declared invalid might have unanticipated implications that cost you time and money. Be certain that your contractual agreements accurately represent your goals, safeguard your interests, and are legally binding.