Project Report

Voidable Contract
examples

an

explanation

with

MANIPAL UNIVERSITY JAIPUR

SCHOOL OF LAW

UNDER SUPERVISION OF

SUBMITTED BY-

Sunita Singh Khatana

Anshuman Singh
Reg. No.- 161401022
Section A

CERTIFICATE

This is to certify that Mr. ANSHUMAN SINGH of B.A.LL.B (Hons),

MANIPAL UNIVERSITY JAIPUR, has completed his project under my
supervision. he has taken proper care and almost sincerity in completion of this
project.
I certify that this project is upto my expectation and as per the guidelines.

Teachers Sign

ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher Sunita

Singh Khatana as well as our dean Mrs. MRIDUL SHRIVASTAV MAAM
who gave me the golden opportunity to do this wonderful project on the topic
Voidable Contract an explanation with examples which also helped me in
doing a lot of Research and I came to know about so many new things I am
really thankful to them.
Secondly I would also like to thank my parents and friends who helped me a lot
in finalizing this project within the limited time frame.

ANSHUMAN SINGH

Contents

1: INTRODUCTION..............................................................................................................5
2: Mukesh Ambani..................................................................................................................6
3: Lakshmi Niwas Mittal: .....................................................................................................6
4: Azim Premji......................................................................................................................7
5: Anil Ambani....................................................................................................................8
6: Shashi and Ravi Ruia.. ...................................................................................................9
7. Savitri Jindal ....................................................................................................................10
8.Kushal Pal Singh.......................................................................................................10
9. Kumar Birla .11
10. Sunil Mittal..12
11. Indu Jain..13
12.Conclusion14
13. WEBLIOGRAPHY14

INTRODUCTION
Voidable
contract
A voidable contract, unlike a void contract, is a valid
contract which may be either affirmed or rejected at the option
of one of the parties. At most, one party to the contract is
bound. The unbound party may repudiate (reject) the contract,
at which time the contract becomes void.
Typical grounds for a contract being voidable include
coercion, undue influence, misrepresentation or fraud. A
contract made by a minor is often voidable, but a minor can
only avoid a contract during his or her minority status and for
a reasonable time after he reaches the age of majority. After a
reasonable period of time, the contract is deemed to be ratified
and cannot be avoided.
when the contract is entered into without the free consent of
the party , it is considerate as a voidable contract .The
definition of the act states that a voidable contract is
enforceable by law at the option of one or more parties but not

at option of the other parties. voidable contract will be

considered as valid if it is not cancelled by the aggrieved party
within a reasonable time .

Void Contract Vs Voidable Contract

Basis for
Comparis
on

Meaning

Void Contract

Voidable Contract

The contract in which

one of the two parties
The type of contract which
has the option to
cannot be enforceable is
enforce or rescind it, is
known as void contract.
known as voidable
contract.

Section 2 (i) of the

Section 2 (j) of the Indian
Defined in
Indian Contract Act,
Contract Act, 1872.
1872.

Nature

The contract is valid, but

subsequently becomes
invalid due to some
reasons.

The contract is valid,

until the party whose
consent is not free, does
not revokes it.

Reasons

Subsequent illegality or
impossibility of any act
which is to be performed
in the future.

If the consent of the

parties is not
independent.

Rights to
party

No

Yes, but only to the

aggrieved party.

Suit for
damages

Not given by any party to

another party for the nonDamages can be
performance, but any
claimed by the
benefit received by any
aggrieved party.
party must be restored
back.

Definition of Void Contract

A void contract is a contract which is not enforceable in the
court of law. At the time of formation of the contract, the
contract is valid as it fulfills all the necessary conditions
required to constitute a valid contract, i.e. free consent,
capacity, consideration, a lawful object, etc. But due to a
subsequent change in any law or impossibility of an act,
which are beyond the imagination and control of the parties to
the contract, the contract cannot be performed, and hence, it
becomes void. Further, no party cannot sue the other party for
the non-performance of the contract.
The contract becomes void due to the change in any law or
any government policy for the time being in force in India.
Along with that, the contracts which are opposed to public
policy also ceases its enforceability. Contracts with
incompetent persons are also declared void like minor,
persons of unsound mind, alien enemy or convict, etc.

Definition of Voidable
Contract
Voidable Contract is the contract which can be enforceable
only at the option of one of the two parties to the contract. In
this type of contract, one party is legally authorized to make a
decision to perform or not to perform his part. The aggrieved
party is independent to choose the action. The right may arise
because the consent of the concerned party is influenced by
coercion, undue influence, fraud or misrepresentation, etc.

The contract becomes valid until the aggrieved party does not
cancel it. Moreover, the party aggrieved party has the right to
claim damages from the other party.

Indian Contract Act,

1872
The law relating to contracts in India is contained in INDIAN
CONTRACT ACT, 1872. The Act was passed by British
India and is based on the principles of English Common Law.
It is applicable to all the states of India except the state of
Jammu and Kashmir. It determines the circumstances in
which promises made by the parties to a contract shall be
legally binding on them. All of us enter into a number of
contracts everyday knowingly or unknowingly. Each contract
creates some rights and duties on the contracting parties.
Hence this legislation, Indian Contract Act of 1872, being of
skeletal nature, deals with the enforcement of these rights and
duties on the parties in India.
The Act as enacted originally had 266 Sections, it had wide
scope and included.
General Principles of Law of Contract- Sections 01
to 75
Contract relating to Sale of Goods- Sections 76 to
123

 Special Contracts- Indemnity, Guarantee, Bailment

& Pledge- Sections 124 to 238
Contracts relating to Partnership- Sections 239 to
266

Explanation
In contracts, voidable is a term typically used with respect to a
contract that is valid and binding unless avoided or declared
void by a party to the contract who is legitimately exercising a
power to avoid the contractual obligations.
A contract may be voidable on the grounds of Fraud, mistake,
Misrepresentation, lack of capacity, duress, Undue Influence,
or abuse of a fiduciary relationship. A contract that is based on
one of these grounds is not automatically void but is voidable
at the option of the party entitled to avoid it. For example, a
person who was induced by fraud to enter into a contract may
disclaim the contract by taking some positive action to
disaffirm the contract. Or the victim of the fraud may ratify
the contract by his or her conduct or by an express affirmation
after acquiring full knowledge of the facts. Likewise, a
contract between a minor and another party is generally

viewed as voidable by the minor. The minor may legally

decide to ratify the contract or disaffirm the contract.
A voidable marriage is a marriage that is valid when entered
into and remains completely valid until a party obtains a court
order nullifying the relationship. The parties may ratify a
voidable marriage upon removal of the impediment
preventing a lawful marriage, thus making the union valid.
Living together as Husband and Wife following the removal
of the impediment typically constitutes a ratification. A
voidable marriage can only be attacked by a direct action
brought by one of the parties against the other and therefore
cannot be attacked after the death of a spouse. It differs from a
void marriage where no valid marital relationship ever
existed.
Most jurisdictions hold that the marriage of a person under the
statutory age of consent but over the age of seven is voidable
rather than void. Such a marriage may be subject to attack
through an Annulment or may be ratified when the under-age
party reaches the age of consent. Some jurisdictions have
determined that a marriage involving an incompetent party is
void, but others hold that such a marriage is only voidable. A
voidable marriage involving an incompetent party may be
ratified during periods when the party is lucid or after she or
he regains competency. Generally, a marriage procured or
induced by certain types of fraud is viewed as voidable;
voluntary Cohabitation following a disclosure of all pertinent
facts ratifies the marriage. A marriage made without the
voluntary consent of one of the parties is generally considered
voidable. Moreover, a person who is so intoxicated at the time
of marriage as to be incapable of understanding the nature of

the marital contract lacks the capacity to consent, and such a

marriage is voidable.

Examples
A promises B to sell his horse after one
month to B for Rs. 50,000. Before the
completion of one month, the horse died.
Now, the contract becomes void as the
contract cannot be performed, i.e. the object
on which the parties agreed is no more, so
there is an impossibility of performance of
the contract. This type of Contract is known
as Void Contract.
X says to Y, that he should sell his new
bungalow to him at a nominal price
otherwise, he will damage his property and Y
enters into a contract due to fear. In this
situation, the contract voidable as the
consent of Y is not free, so he has the right to
avoid the performance of his part. As well as
he can claim for any damages caused to him.

CONCLUSION
There are many contracts which are valid, but
sometimes due to certain circumstances, they
cease to be enforceable which makes them a
void contract because it is impossible that the
contract is to be further executed. Similarly,
many people unlawfully induce or persuade the
will of another person to enter into a contract,
which becomes voidable at the option of the
party whose consent was so induced.

WEBLIOGRAPHY
1. http://keydifferences.com/difference-between-void-and-voidable-contract.html
2. DATE :19/08/2016
TIME:08:15PM
2. https://en.wikipedia.org/wiki/Voidable_contract
DATE:19/08/2016
TIME:9:29pm
3. http://www.businessdictionary.com/definition/voidable-contract.html
4. Date 19/08/2016
5. Time:11:52