As a professional, it is important to understand the difference between void and illegal contracts.
In simple terms, a void contract is one that is invalid from the beginning and has no legal effect whatsoever. An illegal contract, on the other hand, is one that is prohibited by law.
Let`s take a closer look at each type of contract:
Void Contracts:
A void contract is one that is considered to have never existed in the first place. This can happen for a variety of reasons, including:
– Lack of capacity to contract: For example, a contract entered into by a minor (someone under the age of 18) is generally voidable and can be cancelled at the option of the minor.
– Mistake: If both parties were mistaken about a material fact when entering into the contract, the contract may be void.
– Fraud: If one party intentionally deceives the other party in order to induce them to enter into the contract, the contract may be void.
– Illegality: If the subject matter of the contract is illegal (e.g. a contract to sell drugs), the contract is automatically void.
Illegal Contracts:
An illegal contract, as the name suggests, is one that is prohibited by law. This can include contracts that are:
– Against public policy: For example, a contract to commit a crime or to sell a kidney.
– In violation of a statute: Contracts that are in violation of specific laws (e.g. contracts to discriminate against a protected class).
– Contrary to morality: Contracts that are considered immoral by society (e.g. a contract to engage in prostitution).
While void and illegal contracts may seem similar, they have different legal consequences. Void contracts are considered to have never existed, while illegal contracts are considered to be voidable. This means that an illegal contract can be cancelled by either party, but a void contract does not need to be cancelled as it was never legally binding in the first place.
In conclusion, understanding the difference between void and illegal contracts is important if you are involved in any type of contract negotiations or legal disputes. By knowing whether a contract is void or illegal, you can better understand your legal rights and obligations. If you are unsure about the validity of a contract, it is always best to consult with a lawyer.