What are the differences between a void contract and a voidable contract? Provide examples.
Which party or parties to a voidable contract have the right to disaffirm the contract? Can written agreements be modified orally? Explain why or why not.
There are a misconception regarding void and voidable contracts. Some do not even see the differences between the legal terms. This posting clears up this issue.
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 is a misuse of terms to call transaction a void contract. It may be called accurately a void transaction or a void agreement (Rahman, 2006).
Rahman (2006) stated this 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".
"If a contract can be rejected by one of the parties on legal grounds, it is called a voidable contract. A voidable contract is valid and binding unless the entitled party (the party who has legal grounds to reject the contract) voids it. A defect exists. The defect may be cured by ratification of the entitled party" (Contract Law, n.d.).
StasoSphere (2009) gives an example of a voidable contract: "A agrees to sell a $5,000 automobile to B, a minor (not yet 21 years of age). A is bound to furnish the automobile and cannot plead that B was not of age; B may refuse ...
The solution differentiates void from voidable contract. It also argued that oral agreements between parties are enforceable.