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Title: All Contracts are Agreements, but all Agreements are not
Contracts
Submitted to
Debashis Saha
Lecturer
Department of Finance & Banking
Faculty of Business Studies
Submitted by
Md. Tanim Hossain
ID - 20152105
Batch: 12th (Finance & Banking)
Program: MBA
Jahangirnagar University
Submission Date: December 31, 2016
Introduction
Void contract and voidable contract, they almost seems same sound and for this reason is very
usual that people get easily confused between this two different types of contract. In sort, Void
Contract is the contracts that cannot be enforceable, but the Voidable Contract is the contract in
which one party has the right to enforce or rescind the contract. Form the definition we can easily
see
that
there
is
huge
difference
between
them.
A contract which lacks enforceability is Void Contract. A contract which lacks the free
will of one of the parties to the contract is known as Voidable Contract.
Void Contract is defined in section 2 (j) while Voidable Contract is defined in Section 2
(i) of the Indian Contract Act, 1872.
A void contract was valid at the time when it is created, but later on, it becomes invalid.
Conversely, the voidable contract is valid until the aggrieved party, does not revoke it
within stipulated time.
In void contract, no party can claim any damages for the non-performance of the contract.
On the other hand, the aggrieved party can claim damages for any loss sustained.
Comparison Chart
BASIS
FOR
VOID CONTRACT
VOIDABLE CONTRACT
COMPARISON
Meaning
cannot
enforceable
is
as void contract.
the
Nature
(j)
Section
Indian
Contract
of
as
contract.
the Section 2
Act, Indian
voidable
(i)
of
Contract
the
Act,
1872.
1872.
The contract is valid, The contract is valid,
but
to
Defined in
option
is
not
free,
some reasons.
does not revokes it.
Subsequent illegality or If the consent of the
impossibility of any act parties
which
is
performed
to
in
is
not
be independent.
the
Rights to party
future.
No
aggrieved party.
Not given by any party Damages
can
by
the
party
must
be
restored back.
Conclusion
There are many contracts which are valid, but sometimes due to certain circumstances, they
cease to be enforceable which makes them a void contract because it is impossible that the
contract is to be further executed. Similarly, many people unlawfully induce or persuade the will
of another person to enter into a contract, which becomes voidable at the option of the party
whose consent was so induced.