What Agreements Are Said to Be Void

Agreements form the basis of all transactions and deals in the world of business. However, not all agreements are legally enforceable, and certain types of agreements are said to be void. Understanding what agreements are considered void is crucial for business owners, as failure to comply with legal norms can lead to penalties and even legal action. In this article, we will discuss what agreements are said to be void and the reasons behind their invalidity.

An agreement can be defined as a contract between two or more parties that lays out the terms and conditions of a transaction or a deal. However, if an agreement violates the law, it is deemed void and unenforceable. In other words, the courts will not recognize or uphold the agreement, and neither party can legally enforce its terms.

The following types of agreements are said to be void:

1. Agreements that are against public policy

An agreement that goes against the morals, ethics, and standards of the society is considered against public policy and therefore void. For example, an agreement to supply illegal drugs is against public policy and, thus, void. Similarly, an agreement to bribe a public official is also void as this act is against public policy and a violation of the law.

2. Agreements made by a minor

Contracts made by minors (that is, individuals under the age of 18 years) are generally voidable at the option of the minor. However, in some states, certain types of contracts, such as contracts for necessities like food and shelter, may be enforceable against minors.

3. Agreements with a mentally unsound person

An agreement made with a person who is mentally unsound is voidable. The person must be incapable of understanding the terms of the agreement to make it void.

4. Agreements with fraud or duress

If an agreement is made under duress (pressure or coercion) or with fraud (deception or misrepresentation), it is considered void. For example, if a salesperson uses false information to convince a buyer to purchase a product, the contract is void.

5. Agreements that restrict trade

An agreement that is designed to restrict trade or competition is considered void. These types of agreements can include price-fixing, market sharing, and exclusive dealing arrangements.

6. Agreements with no consideration

Consideration refers to the benefit that both parties receive from an agreement. An agreement without consideration, in which one party is not receiving any benefit, is considered void. For example, an agreement to gift a property is not legally enforceable unless there is some consideration given by the recipient.

Conclusion

In conclusion, not all agreements are legally enforceable, and certain types of agreements are considered void. An agreement that violates the law or goes against public policy is deemed void and unenforceable. Business owners must understand the types of agreements that are considered void to ensure that their transactions are lawful and to avoid legal complications.