Elements needed to make the contract enforceable.
Certain elements must be present to make an agreement to purchase property enforceable.
- The parties entering into a contract must be legally competent to contract (capacity of the parties)
- The contractual arrangement must be lawful (lawful object or legality of object).
- Each party must receive something (consideration).
- There must be offer and acceptance (mutual agreement).
- Both parties must consent to the terms of the contract (genuine intention).
- The agreement must be certain (definite and clear).
If Elements Missing
A contract, not fulfilling all requirements, may be either void or voidable:
- Void (never came into existence);
- Voidable (originally valid but capable of being rejected by the offended parties at a later time); or
- Illegal (not enforceable by the courts).
VOID VS. VOIDABLE
A void contract has no force or effect. A contract that is void is said to be a nullity at law. As far as the law is concerned, the agreement does not exist. Neither party can enforce it and neither party has any obligations under it
EXAMPLE - Void Contract
A void contract can occur when the agreement is impossible to perform. For example, A Seller and Buyer enter into an agreement to purchase an isolated cottage. Unknown to either party, the cottage was destroyed by fire during the winter. All of the elements of the contract are in existence, but the structure is not. Both buyer and seller are mistaken as to this essential fact and the contract is impossible to perform and would undoubtedly be judged void.
Conversely, a voidable contract is enforceable, valid and binding until rendered void. A contract that is voidable is one where the offended party may make a choice. The person may choose to avoid the contract and treat it as being at an end, or to treat it as subsisting and enforce it against the offending party. A good example of a voidable contract involves minors.
EXAMPLE - Voidable Contract
An example of a voidable contract involving undue influence can include a situation where one party, by virtue of a special relationship to the other, is in a position of confidence and abuses that position. In cases such as relations between parent and child or solicitor and client, presumption of undue influence may arise that can be rebutted by showing that, in fact, the person susceptible to influence was able to form a decision free of any sort of control
The fact that the person claiming undue influence received independent legal advice or independent valuations of the property are excellent ways of establishing that no undue influence occurred. Where undue influence is shown, the contract is voidable, not void. That is, the person claiming undue influence must go to court to have the contract adjudged void.
The question of void and voidable contracts relates to much larger issues concerning avoidance of a contract. In other words, cases may arise where the elements of a valid contract are present (i.e., not void) but where the promise of one or both parties has been given on the basis of or affected by some misunderstanding, false inducement, force, or the like, so that the offended party has rights of redress. Usually the two types of redress for grievances of this kind are either to allow avoidance of the contract altogether or to obtain damages for the conduct of the other party. Such instances involve voidable contracts as opposed to void contracts; i.e., contracts that do not exist.
