The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:
A void contract is one that is wholly lacking in legal effect. A contract will be void where:
the parties contract on the basis of a fundamental common mistake
one party contracts on mistaken terms and the other party knows of the mistake
one party is mistaken as to the other party’s identity
a party executes a document under a fundamental misapprehension as to its nature (non est factum)
a statute provides for a contract to be avoided
A contract that is void must be distinguished from one that is merely voidable and one that is unenforceable.
The distinction between a void contract and a voidable contract is especially significant in the context of third party rights. A third party will not be able to acquire rights under a void contract. However, where a contract is merely voidable and the person entitled to avoid the contract has not exercised their right to do so, the third party will acquire rights.
To speak of a void contract is a contradiction in terms because if a contract is truly void it is not a contract at all.
A contract that is void produces no legal relationship between the parties. The contract is said to be void ab initio, meaning any payments made or property transferred
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