A void contract is one which has no legal effect whatsoever owing to the fact that a transaction which is void is without any legal effect, it I a misuse of terms to call transaction a void contract. It may be called accurately a void transaction or a void agreement.
For an example, a storekeeper agrees to purchase stolen goods. The thief has no recourse at law because the agreement to purchase the goods was void as it assisted a thief to get the benefit or his crime.
Void and illegal contracts distinguished:
A void contract is one which has no legal effect. An illegal contract, like the void contract has no legal effect as between the immediate parties, but has this further effect that transactions collateral become tainted with illegality and therefore become enforceable.
Wagering contract: in Bombay presidency wagering contract are unlawful by statute, and taint collateral transactions rendering themes void. In the rest of India wagering contract are only void, and thus collateral contracts are not affected.
What is a wager?
A wager is a promise to pay money or transfer property upon the happening of an uncertain event, betting on the result of a horse race, a wrestling match is example.
Commercial transaction may amount to wagering contract if both parties at the time of entering into contract have the intention to give and take delivery of goods, but only to settle difference option dealings are good contracts. Agreements in respect of immoral purpose are not only void but illegal. Void contract collateral to an immoral contract knowingly entered into equally unenforceable.
When a contract become void:
An agreement not enforceable by law is void bonito but a contract which cease to be enforceable by la become void hen it cease to be enforceable.
A contract becomes void when, by reason of some event which the promissory could not prevent the performance of the contract become impossible. The impossibility must happen after the formation of the contract.
For an example, a And b contract to marry each other. Before the time fixed for the marriage, a goes mad. The contract becomes void.
A contract also becomes void by reason of subsequent illegality.
For another Example, A in England agree to supply good to B in Germany. After the formation of the contract war breaks out between England and Germany. And the supply of goods to Germany I prohibited by legislation. The contract becomes void.
A Contingent contract to do or not to do anything if an uncertain future even happens becomes void if the event become impossible.
Where a contract is void able at the option of the promise the contract becomes void when the promisee exercises his option by avoiding the contract.
Agreement opposed to public policy:
a) Agreement for stifling precision and for outing jury diction of courts are unlawful
b) Agreement curtailing or extending the period of limitation prescribed by law are not enforceable.
c) Agreement in fraud of insolvency law is illegal.
d) Agreement for using improper influence of any kind with judge or officer of justice is void.
e) Agreement in restraint of the marriage of any person other then a minor is void.
f) Agreement to procure marriage for reward is void.
g) Agreement to pay money to parent or guardian in consideration of giving his daughter in marriage I void. Similarly, a promise by the bride’s Parent to pay money to the bridegroom or his parent I illegal.
h) Traffic by ay of ale in public office and Appointment or title for monetary consideration I illegal.
i) Agreement tending to create monopoly are void.
j) Agreements in restraint of trade are void, partial restraint I allowed in sale of Goodwill.
k) Contract unduly retrain individual liberty are enforceable.
Capacity of Parties:
In general every person is presumed by law to be competent to contract and anyone claiming exemption from liability on the ground of incapacity to contract must strictly prove it. In capacity to contract may arise out of (a) mental deficiency or (b) status. Minor lunatic, idiot and drunken person fall under (a) and foreign sovereign, ambassador, alien enemies, Professional people, corporation and married women under (b).
A minor contract is absolutely void. He I not bound by it, none can ratify it on attaining the age of majority. It I void even here the Minor misrepresented his age.