A contract is a legally binding agreement between two or more parties that outlines their respective rights and obligations. But what happens if one of the parties wants to get out of the contract? In some cases, a contract can be voided, which means that it is deemed to have never existed legally. This can occur if there is a flaw in the contract’s creation, such as a lack of offer or acceptance, or if there is a legal issue with the contract, such as illegality or duress.
In this blog post, we will explore the different ways a contract can be voided, including a declaration that a contract is void and setting aside or rescinding the contract.
Void at Common Law
At common law, a contract that does not meet certain legal requirements is considered void, meaning that it never existed legally. This voidness is not dependent on the will of either party, but rather on the assessment of the law. Any person, not just a party to the contract, can argue that the contract is void.
There are several reasons why a contract may be void from the outset. For example, if the offer or acceptance is uncertain or if there was no intention to create legal relations, the contract may be considered void. If one of the parties was not legally capable of entering into a contract, or if there was illegality involved in the contract’s creation, purpose, or impact, the contract may also be considered void. In some cases, a contract may be declared void if it was entered into under duress or because of a mistake.
Consequences of Voidness
If a contract is void, there is no basis for any contractual obligations or claims to property that was transferred under the contract. Any property that was transferred may be reclaimable under property or restitutionary laws. However, if the transfer of property was effective even under an illegal contract, it is likely that the contract is unenforceable rather than void.
In some cases, a single contract may be severable into two or more contracts, with one part being void and the other not void. Alternatively, part of a contract may be severed and declared of no effect, though this is typically considered unenforceable rather than void.
Voidness in the Context of Non Est Factum
The doctrine of non est factum, which relates to mistake, can also lead to a contract being void. However, this result can typically only be argued by the mistaken party and not the other party. If one party misled the other, the misled party may seek a declaration that there is no contract between them.
Setting Aside or Rescinding the Contract
If a contract is considered voidable, meaning that it is legally valid but can be cancelled by one of the parties, the contract can be set aside or rescinded. This typically occurs if the contract was entered into under duress or if one of the parties was misled or made a mistake. In such cases, the contract can be cancelled, but the other party may still be entitled to compensation or damages.
In conclusion, if you want to get out of a contract, it is important to understand the different options for voiding the contract. Whether a contract is void from the outset or can be set aside, it is always best to seek legal advice to determine the best course of action.