Voidable Agreement

According to Section 2 (e) of the Indian Contract Act, 1872,” Every promise and every set of promises forming the consideration for each other is an agreement”

The party making the proposal is called the ‘promisor’ and the party accepting the proposal is called ‘promisee’.

Different types of agreement

  1. Valid Agreement – Agreements having proposal and clear acceptance, parties being competent to contract as per Section 11 and 12 of the Indian Contract Act, 1872. The parties entering into the contract should give their free consent. The agreement should be lawful in nature.
  2. Void Agreement – As per Section 2(g) of the Indian Contract Act, 1872,” an agreement not enforceable by law is said to be void”.
  3. Voidable Agreement – A voidable agreement can be defined as an agreement that can be revoked by either party due to various legal reasons.
  4. Wagering Agreement – An agreement where one party promises to pay the other party on the occurrence of a certain event and the other party promises to pay the first party on the event not happening. A wagering contract is void in nature.
  5. Contingent Agreement – A contingent contract is defined under Section 31 of the Indian Contract Act, 1872 as a contract to perform or not perform an obligation if some event collateral to such contract does or does not happen.
  6. Express or Implied Agreement – As per Section 9 of the Indian Contract Act, 1872 states that any promises made through words by the parties shall be considered as an express agreement and any promise made other than words is considered to be an implied agreement.
  7. Illegal Agreement – Agreements that are against the legal provisions or morals of law are considered to be illegal agreements.

A voidable agreement is initially enforceable by law but can be opted out of liability to follow by any one of the parties if the contract is found to have a flaw. But if the parties to the contract choose not to reject the contract despite it being flawed, the contract remains valid and enforceable by law.

A mutual mistake on the part of the parties makes a contract voidable, or pieces of information being omitted from the contract also make it voidable, a contract involving a minor is a voidable contract but if the minor chooses to fulfill the contract on attaining the age of majority, the contract becomes enforceable by law.

Difference between voidable agreement and void agreement:

  • Void agreements are invalid right from the starting whereas Voidable agreements become invalid when one of the parties involved cancels them for legal reasons.
  • The defects of a voidable agreement are curable, whereas a void agreement is void ab initio and its defects are not curable.
  • A voidable contract does not become void till the party who has the option to repudiate it, rejects the agreement. There is no such provision in case of void agreement as they cannot be enforceable by law from the very beginning.
  • In a voidable agreement, it can be implied that one of the parties has not given their free consent, whereas a void agreement denotes an agreement that does not fulfill the essential elements of a valid contract.
  • In a voidable contract a person can claim and is entitled to compensation for loss or damages suffered by him due to non-performance of the contract, whereas there is no such provision in the case of void agreement as it is unenforceable by law.
  • A void contract is nonexistent and cannot be enforceable by law, whereas a voidable contract is an existing contract and is binding to at least one of the parties involved in the contract.

In Lewis Pugh v. Ashutosh Sen, 1929, that if “fraudulent within in the meaning of Section 17” qualifies “misrepresentation”, due diligence is required in cases where misrepresentation because fraudulent, but not in cases where misrepresentation falls within Section 18 and is just sort of fraud because the exception is limited to the former kind only. Therefore, this case helped in understanding the overlapping relationship between fraud and misrepresentation under the Indian Contract act, 1872, both of which contribute to rendering a contract voidable at the option of one of the parties to the same.

Under the Prohibition of Child Marriage Act, 2006, marriage with a minor is not void. Child marriage is voidable at the option of any contracting party who was a child or minor at the time of marriage. The marriage can be declared invalid by the person who was a child at that point of time within two years of that person attaining majority. The State of Karnataka has amended the PCMA in 2017 to make child marriage void as per the report of the Shivraj V. Patil Core Committee. This step was lauded by the Supreme Court in the 2017 judgment of Independent Thought v. Union of India. Recognizing the possible and prevalent health risks associated with early marriage and sexual intercourse, the Court remarked that other State Legislatures should follow the route taken by Karnataka and declare child marriage to be void.

In Chikham Amiraju v. Chikham Seshamma, it was held by the Madras High Court that threat given by a man to commit suicide totally amounts to coercion under Article 15 of the ICA. The dissention Judges were of the view that even though the act of suicide is not punishable, attempt to suicide is punishable under the IPC.

In Muralidhar Chatterjee v. International Film Co Ltd, AIR 1974 SC 1924, there was a breach of contract on the account of delay. A suit was filed for to refund of the money. The Privy Council in its judgment stated that the money should be refunded as per Section 64 of the Indian contract Act, 1872. In the Judgment, Hon’ble Justice George Rankin held that the contract which may be put end to under Section 39 of the Indian Contract Act, 1872 is voidable.

Reference:

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