Void and Voidable Contracts

Void and Voidable Contracts Void Contracts: A contract is void if it is worthless, that is, not

really a contract at all. Some contracts made by minors, for example,

are automatically void. Contracts may be declared void on the basis

that they oblige the contracting parties to commit illegal acts.

Damages cannot be claimed by a party injured by attempting to comply

with a void contract. For example, if I contract to pay someone to

shoot a TV game show host, and the would-be murderer decides to take

the money and run without satisfying his part of the deal, then the

courts will not assist me to recover the money. The illegality need

not be as serious as murder for this to be the case. Some contracts

may not be strictly void, but can be declared void. The distinction is

important because when goods or property are exchanged under a

voidable contract, title is passed. With a void contract no title

passes, because effectively the contract never existed.

Voidable Contracts: Unlike a void contract, whose legal status is as

if it never existed, a voidable contract is one that remains in force

until it is declared void by one of the contracting parties. For

example, one of the parties may fraudulently misrepresent a service to

be offered. The offended party may then declare the contract void and

refuse to be bound by it. However, if goods are exchanged under the

contract before it is voided, then title is passed. With a void

contract no title passes, because effectively the contract never

existed.

1. In this case Karen orders a sofa and when it is delivered, finds ...

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...sed to determine whether the restraint clause

applies in total, or in part, or not at all. The courts try and strike

a balance between protecting the goodwill of the employer and allowing

the employee to earn a living. The test of reasonableness is applied

to duration of the restraint, the radius of it and the scope of it.

In the case of Omar, it would be unreasonable to expect him not to

work for another firm of architects within Europe or the USA for the

next ten years. A reasonable restraint would have been that he could

not work for a firm of architects within the West Midlands area for

two years following his termination of the contract. This would at

least give him the option of working within England to earn a

reasonable living. Therefore the clause is not valid and hence renders

the contract in question void.