What Is the Difference Between a Void and a Voidable Contract?

Important Notes (void contracts)

1) Statutory anchors & taxonomy (ICA 1872)

The Act distinguishes between a void agreement (s.2(g)), a voidable contract (s.2(i)), and a void contract (s.2(j)). In practice: (i) some agreements are void ab initio because they lack a foundational requirement (e.g., unlawful object, uncertainty); (ii) a contract may later become void (e.g., supervening impossibility under s.56). Sections 23–30 supply the principal invalidating rules: unlawful object/consideration (ss.23–24), restraints of marriage/trade/legal proceedings (ss.26–28), uncertainty (s.29), wagers (s.30), bilateral mistake of essential fact (s.20), and the general rule about consideration (s.25, with specified exceptions).

2) Wagers — void but not necessarily “illegal”

The classical position (e.g., Gherulal Parakh v Mahadeodas Maiya) is that wagering agreements are void under s.30 but not per se “illegal” under s.23, so collateral transactions are not automatically tainted. This matters for banking/credit arrangements that sit alongside a wager. (Always check local/state statutes: some jurisdictions elevate wagers to illegality.)

3) Capacity — minors and necessaries

A minor’s agreement is void ab initio (Mohori Bibee v Dharmodas Ghose); it cannot be ratified on attaining majority. Two important adjustments: (i) s.68 permits reimbursement from the minor’s estate for “necessaries” supplied; (ii) the burden of proving goods were “necessaries” lies on the supplier — a point illustrated in English law by Nash v Inman (student’s clothing not shown to be necessaries).

4) Common mistake — a narrow doorway to voidness

Common mistake renders an agreement void only where the mistake is fundamental (e.g., the subject matter does not exist, or identity is essential). English law is deliberately strict: Bell v Lever Bros and Great Peace Shipping confine the doctrine; most commercial mistakes go to quality, not identity, and therefore do not void a contract. The famous “two ships Peerless” case (Raffles v Wichelhaus) shows that latent ambiguity about the subject matter can prevent a binding consensus at all.

5) Frustration/supervening impossibility — discharge by law

Where performance becomes impossible or unlawful after formation, the contract is discharged by operation of law. The English cornerstone is Taylor v Caldwell (destruction of the music hall). Under s.56 ICA, agreements to do impossible acts are void; if the impossibility arises later, the contract “becomes void” from that point (Satyabrata Ghose v Mugneeram Bangur). The consequences differ by system: in India/Pakistan, s.65 provides for restitution of advantages upon discovery or supervening voidness; in England, the Law Reform (Frustrated Contracts) Act 1943 allows recovery of pre-payments and adjustment of expenses/benefits to achieve a just result.

6) Restraint & uncertainty — drafting traps

Restraint of trade (s.27): broadly void in the ICA (subject to narrow statutory carve-outs), unlike the English reasonableness approach (Nordenfelt) which enforces narrowly tailored restraints protecting legitimate interests. Uncertainty (s.29): an agreement must be certain or capable of being made certain — vague or internally inconsistent bargains are void.

7) No consideration — remember the exceptions

The general rule is “no consideration, no contract,” but s.25 preserves enforceability where: (i) the promise is in writing and registered and made on account of natural love and affection between parties standing in near relation; (ii) the promise compensates a past act done at the promisor’s desire; (iii) there is a written promise to pay a time-barred debt. (Completed gifts also stand; and note in agency law, consideration is not required to create an agency.)

8) Effects & pleading

A void agreement creates no rights and cannot be affirmed; it can be raised defensively (to resist enforcement) and, where useful, offensively via a declaration that no binding contract ever existed. Where illegality is involved, courts may refuse to assist a claimant (in pari delicto), though modern restitutionary approaches assess proportionality and policy when deciding whether to order restoration.

Key Notes (voidable for vitiated consent)

1) Misrepresentation — elements, categories, and election

Elements in practice. A contract is voidable for misrepresentation where there is: (i) a false statement of existing fact or law (not mere sales puff), (ii) that is material and (iii) induces the representee to contract. Half-truths and statements that become false due to a change of circumstances may also be actionable if not corrected. Silence alone usually is not, unless there is a duty to speak (e.g., fiduciary contexts, insurance).

Key cases you cited, with teaching points. Redgrave v Hurd (1881): a representee who relied on a misstatement is entitled to rescind even if they could have discovered the truth with ordinary diligence; the law does not require verification once reliance is shown. Derry v Peek (1889): defines fraudulent misrepresentation as a false statement made knowingly, without belief in its truth, or recklessly. Fraud sounds in damages in tort (deceit) in addition to rescission.

Categories in modern use. (a) Fraudulent (deceit): broad damages; (b) Negligent (common law or statute): duty of care in making statements (often framed via the Hedley Byrne line in tort or under statute, jurisdiction-specific); (c) Innocent: rescission is the primary remedy, subject to equitable bars. The contract remains valid unless and until rescinded — hence the need for prompt, unequivocal election once the misrepresentation is discovered.

Practical checklist. Identify the exact statement; fix the timeline of reliance; preserve emails/marketing materials; give clear notice of rescission; be prepared to offer counter-restitution (return benefits) to strengthen the equity in your favour.

2) Undue influence — actual and presumed, with safeguards

Concept and structure. Undue influence vitiates consent where one party’s will is overborne or where a relationship of trust and confidence is exploited. It is typically analysed as: (a) actual undue influence (proof of improper pressure/influence), and (b) presumed undue influence, which may arise either from recognised relationships (parent–child, solicitor–client, trustee–beneficiary, doctor–patient, etc.) or from facts showing a relationship of trust and confidence.

Guidance from above cited authority. RBS v Etridge (No 2) (2001) modernised the approach to spouse/surety cases. Where a lender is “put on inquiry” (e.g., a non-commercial surety guarantees another’s debt), the transaction is vulnerable unless the lender takes reasonable steps — typically ensuring the surety receives informed, independent legal advice with access to the essential financial information. This does not shift legal burden wholesale, but it sets a procedural standard: if the safeguards are missing, the creditor risks having the security set aside as voidable for undue influence.

Practice points. Document the advice meeting for the surety; separate interviews; ensure the adviser has the core documents; keep a signed confirmation. For claimants, assemble evidence of dependency, trust, and the absence of truly independent advice.

3) Duress & economic duress — illegitimate pressure and causation

Core test. Duress renders a contract voidable where there is (i) illegitimate pressure (which can be unlawful threats, or in limited cases lawful acts used illegitimately) that (ii) causes the victim to enter the contract, typically shown by lack of a practical alternative. Timely protest and prompt steps to avoid the contract once the pressure lifts are persuasive factors.

Your authorities, unpacked. Barton v Armstrong (1976): threats to the person are classic duress; the improper pressure need only be a contributing cause of the decision to contract. Universe Tankships (1983): sets out the modern economic-duress framework — look for illegitimate pressure and compulsion (no practical alternative); the remedy is rescission and restitution. Pao On v Lau Yiu Long (1980): lists practical factors to test coercion, including protest, availability of alternatives, independent advice, and steps taken to avoid the contract.

What counts as “illegitimate”? Demands backed by unlawful threats (e.g., breach of contract, crime) usually qualify; “hard bargaining” backed by legitimate commercial leverage usually does not. Some systems recognise “lawful-act duress” in narrow circumstances where the threat is lawful but unconscionable in context — this is exceptional and fact-sensitive.

Practice points. Preserve contemporaneous notes of threats/timelines; record attempts to seek alternatives; notify the counterparty of rescission without delay; avoid conduct that could be construed as affirmation (e.g., continuing to perform after pressure ends).

4) Interaction between grounds and remedies

Misrepresentation, undue influence, and duress each make the contract voidable, not void. That means: (a) the innocent party must elect to rescind or affirm; (b) rescission is subject to equitable bars (delay, affirmation, impossibility of counter-restitution, and prejudice to bona fide third parties); (c) damages may be available alongside or instead of rescission under local statutes or tort principles. Always map the remedy to the ground and check for bars before litigating.

Doctrinal Notes (with leading cases)

1) Rescission — when equity says “no”

Lapse of time. Rescission is an equitable remedy: delay can bar relief even where misrepresentation is proved. In Leaf v International Galleries [1950] 2 KB 86, the buyer discovered years later that a painting was not by Constable. The Court of Appeal held that the right to rescind had been lost through lapse; equity expects prompt election once the representee could reasonably discover the truth. 

Impossibility of substantial restoration. Rescission aims to restore the parties, as nearly as possible, to their pre-contract positions (restitutio in integrum). In Erlanger v New Sombrero Phosphate (1878) 3 App Cas 1218 (HL), the House of Lords affirmed that if counter-restitution is genuinely impossible, rescission may be refused; however, equity is practical, and an account of profits or monetary adjustments can be ordered to approximate restoration.

Prejudice to a bona fide purchaser and “acts of rescission”. Rescission will not be granted if it would unfairly harm an innocent third party who acquired rights before rescission. Car & Universal Finance v Caldwell [1965] 1 QB 525 shows how a defrauded seller can effectively rescind without communicating with an absconding rogue: timely, unequivocal steps such as notifying the police or automobile association can constitute an “act of rescission,” cutting off the rogue’s ability to pass good title.

2) Restitution on void/voided agreements

India/Pakistan (ICA 1872). Section 65 codifies restitution: when an agreement is discovered to be void, or a contract becomes void, any advantage must be restored or compensated—think of it as the statutory engine that unwinds transactions once voidness is established. Examples in the section illustrate repayment of money or return of goods as the default response.

Illegality and the modern UK approach. The UK Supreme Court’s decision in Patel v Mirza [2016] UKSC 42 replaces rigid rules with a policy-based test: courts weigh (i) the purpose of the legal prohibition, (ii) any other relevant public policies, and (iii) whether denying the claim would be a proportionate response. The majority allowed restitution despite the illegal purpose because refusing all relief would have been disproportionate.

3) Damages for misrepresentation

Section 2(1) Misrepresentation Act 1967 (UK). Where a party is induced by a misrepresentation made by the other contracting party, s.2(1) provides a damages remedy. In Royscot Trust v Rogerson [1991] the Court of Appeal held that the measure mirrors the tort of deceit—i.e., “fraud” damages—so remoteness is generous and the claimant is put in the position as if the contract had never been made. 

Section 2(2) damages in lieu of rescission. Courts may award damages instead of rescission for (non-fraudulent) misrepresentation, but only where rescission is otherwise available. William Sindall v Cambridgeshire CC [1994] explains the discretionary factors (nature of the misrep; loss if the contract stands; relative equities), and Salt v Stratstone [2015] clarifies that if rescission is barred (e.g., for delay or impossibility), s.2(2) cannot be used to award damages in lieu.

4) Identity fraud & third-party rights (UK)

Face-to-face transactions: usually voidable. In shop-floor dealings, courts presume you intend to contract with the person physically present. Thus in Phillips v Brooks [1919] 2 KB 243, the rogue obtained title voidably (not void), enabling a bona fide third party to take good title before rescission.

Written/remote transactions: may be void for mistake as to identity. In Shogun Finance v Hudson [2003] UKHL 62, the House of Lords treated a hire-purchase deal concluded by documents as a contract with the (falsely named) identity on the paperwork; because identity was fundamental, the “contract” with the rogue was void and title never passed to the subsequent purchaser. The official judgment link is here for reference. :contentReference[oaicite:8]{index=8}