A void contract is a contract that is not legally binding because its elements are unenforceable. For example, an incapacitated person can’t legally enter into a contractual agreement. Clauses that violate existing laws will also void a contract.
Under business law, New York contractors could become embroiled in a dispute over a void contract if the agreement is unclear.
Void contracts include elements like unlawful consideration, where one-party benefits significantly more than the other, or if someone negotiates a contract with a mentally hindered person. Forming a contract with a mentally challenged person for gain could offer additional fines and consequences.
What voids contracts
In business law, both parties must fully agree and accept all elements of the contract; otherwise, it’s void. If you have contention with parts of the agreement but still sign it, that contract is valid. A voidable contract differs from a void contract in that if both parties agree to the terms, the contract is valid.
A person who is incompetent or incapable of making a sound judgment cannot lawfully sign a contract. Unlawful coercion or consideration voids any contract. In business law, a promise of sex or any criminal inducement nullifies contractual agreements.
A contract is an agreement between legally sound parties. All parties must agree to all the conditions. Just because parties intend to enter a legal relationship doesn’t guarantee it’s a valid contract. If the agreement is void after a lawful evaluation of the elements, it’s as if it never existed, even when the parties initially agreed.
Voiding the contract or making the contract voidable depends on the situation. Remember, void means the contract never existed, and voidable means there is room for amending the agreement between the parties.