Monthly Archives: May 2022

Are Illegal Contracts Void or Voidable

Contracts are an essential part of any business transaction or deal that takes place between two or more parties. These contracts, whether written or verbal, define the terms and conditions of a deal, the expectations of the parties involved, and the consequences of any breach of the contract. However, sometimes contracts are formed under illegal or unlawful circumstances, leaving individuals wondering whether such contracts are void or voidable.

So, are illegal contracts void or voidable? Before we answer this question, let`s define what we mean by an illegal contract. An illegal contract is an agreement between two or more parties that involves an action that is considered illegal or against public policy. For instance, a contract to participate in an illegal or immoral activity is considered illegal and thus cannot be enforced.

Now, to answer the question, illegal contracts are void. This means that the contract has no legal effect and cannot be enforced by any court or authority. This is because, in the eyes of the law, an illegal contract is considered to be against the public good and morality. Therefore, no court or authority can recognize or enforce an illegal contract.

On the other hand, a voidable contract is a legal agreement that can be challenged or canceled by one or both parties on the grounds of fraud, misrepresentation, or mistake. In such cases, the contract is initially valid but can be voided if the party seeking to void it can prove that there was a defect in the contract`s formation.

So, what happens when an illegal contract is enforced? An illegal contract that is enforced is considered a wrongful act, subject to penalties and sanctions, and may result in legal consequences for the parties involved. In some cases, people may get into legal trouble if they are caught violating an illegal contract.

In conclusion, illegal contracts are not enforceable, and therefore, they are considered void. Parties cannot rely on illegal agreements to seek legal relief or enforce their rights. So, if you find yourself in a situation where you are asked to enter into an illegal contract, you should steer clear of such arrangements to avoid getting into legal trouble.