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Voidable, in law, is a transaction or action that is valid but may be annulled by one of the parties to the transaction. Voidable is usually used in distinction to void ab initio (or void from the outset) and unenforceable .
The act of invalidating the contract by the party exercising its rights to annul the voidable contract is usually referred to either as voiding the contract (in the United States and Canada) or avoiding the contract (in the United Kingdom, Australia and other common law countries).
Black's Law Dictionary (relevant to US law) defines voidable as follows:
Voidable. That which may be avoided, or declared void; not absolutely void, or void in itself. It imports a valid act which may be avoided rather than an invalid act which may be ratified. United States v Price, D.C. Iowa, 514 F.Supp. 477,480
Generally speaking, one party will have the right to elect whether to annul the transaction or to affirm it. The avoiding of a voidable transaction amounts to the rescinding it or exercising a power of rescission and as such, it is subject to the general law in that regard.
The right to rescind can be lost. In common law, there are generally said to be four "bars" to rescission, any one of which will cause the agreement to no longer be considered voidable:
Although the law varies from country to country, most disputes relating to whether a transaction is void or voidable turn on the ability to transfer title to goods. In many jurisdictions, if a transaction is valid, but voidable, title to good still passes under the transaction, and the recipient may sell them with good title. If the transaction is void, no title passes, and the original seller may reclaim the goods. [5]
| Look up voidable in Wiktionary, the free dictionary. |
Annulment is a legal procedure within secular and religious legal systems for declaring a marriage null and void. Unlike divorce, it is usually retroactive, meaning that an annulled marriage is considered to be invalid from the beginning almost as if it had never taken place. In legal terminology, an annulment makes a void marriage or a voidable marriage null.
Unconscionability is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. Typically, an unconscionable contract is held to be unenforceable because no reasonable or informed person would otherwise agree to it. The perpetrator of the conduct is not allowed to benefit, because the consideration offered is lacking, or is so obviously inadequate, that to enforce the contract would be unfair to the party seeking to escape the contract.
In common law jurisdictions, a misrepresentation is an untrue or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.
In contract law, a mistake is an erroneous belief, at contracting, that certain facts are true. It can be argued as a defense, and if raised successfully can lead to the agreement in question being found void ab initio or voidable, or alternatively an equitable remedy may be provided by the courts. Common law has identified three different types of mistake in contract: the 'unilateral mistake', the 'mutual mistake' and the 'common mistake'. The distinction between the 'common mistake' and the 'mutual mistake' is important.
In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Parties may rescind if they are the victims of a vitiating factor, such as misrepresentation, mistake, duress, or undue influence. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract.
In law, void means of no legal effect. An action, document, or transaction which is void is of no legal effect whatsoever: an absolute nullity—the law treats it as if it had never existed or happened. The term void ab initio, which means "to be treated as invalid from the outset," comes from adding the Latin phrase ab initio as a qualifier. For example, in many jurisdictions where a person signs a contract under duress, that contract is treated as being void ab initio. The frequent combination "null and void" is a legal doublet.
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and consolidated the law. Since 1979, there have been numerous minor statutory amendments and additions to the 1979 Act. It was replaced for some aspects of consumer contracts from 1 October 2015 by the Consumer Rights Act 2015(c 15) but remains the primary legislation underpinning Business-to-business transactions involving selling or buying goods.
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth, and to a lesser extent the United States. It has also experienced changes because of the UK's past membership of the European Union and current membership of international organisations like Unidroit. Any agreement that is enforceable in court is a contract. Because a contract is a voluntary obligation, in contrast to paying compensation for a tort and restitution to reverse unjust enrichment, English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.
The law of mistake comprises a group of separate rules in English contract law. If the law deems a mistake to be sufficiently grave, then a contract entered into on the grounds of the mistake may be void. A mistake is an incorrect understanding by one or more parties to a contract. There are essentially three types of mistakes in contract,
A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requirements and approval of the law. A contract typically involves the exchange of goods, service, money, or promise of any of those. "Breach of contract", means that the law will have to award the injured party either the access to legal remedies such as damages or cancellation.
Leaf v International Galleries [1950] 2 KB 86 is an English contract law case concerning misrepresentation, mistake and breach of contract, and the limits to the equitable remedy of rescission.
The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act regulating Indian contract law. The Act is based on the principles of English Common Law. It is applicable to all the states of India. It determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law.
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 is a landmark English contract law, restitution and UK company law case. It concerned rescission for misrepresentation and how the impossibility of counter restitution may be a bar to rescission. It is also an important illustration of how promoters of a company stand in a fiduciary relationship to subscribers.
In English law, a vitiating factor in the common law of contract is a factor that can affect the validity of a contract. The concept has been adopted in other common law jurisdictions, including the USA.
Capacity in English law refers to the ability of a contracting party to enter into legally binding relations. If a party does not have the capacity to do so, then subsequent contracts may be invalid; however, in the interests of certainty, there is a prima facie presumption that both parties hold the capacity to contract. Those who contract without a full knowledge of the relevant subject matter, or those who are illiterate or unfamiliar with the English language, will not often be released from their bargains.
Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525 is an English contract law case concerning misrepresentation. It holds that an unequivocal act communicating the wish to rescind a contract can override third party rights. The communication does not need to go to the misrepresentor.
South African contract law is ‘essentially a modernized version of the Roman-Dutch law of contract’, which is itself rooted in canon and Roman laws. In the broadest definition, a contract is an agreement two or more parties enter into with the serious intention of creating a legal obligation. Contract law provides a legal framework within which persons can transact business and exchange resources, secure in the knowledge that the law will uphold their agreements and, if necessary, enforce them. The law of contract underpins private enterprise in South Africa and regulates it in the interest of fair dealing.
Solle v Butcher [1950] 1 KB 671 is an English contract law case, concerning the right to have a contract declared voidable in equity. Denning LJ reaffirmed a class of "equitable mistakes" in his judgment, which enabled a claimant to avoid a contract. Denning LJ said,
... a contract will be set aside if the mistake of the one party has been induced by a material misrepresentation of the other, even though it was not fraudulent or fundamental; or if one party, knowing that the other is mistaken about the terms of an offer, or the identity of the person by whom it is made, lets him remain under his delusion and concludes a contract on the mistaken terms instead of pointing out the mistake.... A contract is also liable in equity to be set aside if the parties were under a common misapprehension either as to facts or as to their relative and respective rights, provided that the misapprehension was fundamental and that the party seeking to set it aside was not himself at fault.
Undue influence in English law is a field of contract law and property law whereby a transaction may be set aside if it was procured by the influence exerted by one person on another, such that the transaction cannot "fairly be treated the expression of [that person's] free will".
A disposition in Scots law is a formal deed transferring ownership of corporeal heritable property. It acts as the conveyancing stage as the second of three stages required in order to voluntarily transfer ownership of land in Scotland. The three stages are:
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