However, a contract may be void even if it is lawful. One of the main reasons why a contract becomes invalid is when one of the parties is unable to work and is not allowed to adhere to a contract. v. Edems and Ajayi (1958) NRLR 33. Another law is the Money Laundering Act 1958 (now repealed). This law was enacted specifically to regulate money-lending activities and to protect defenseless borrowers or debtors from oppression, exploitation and persecution by lenders known for their blatant abuse of their advantageous position towards their debtors or victims. This is an area where the doctrine of unequal bargaining power comes into play, and because it was felt that even the flexible and compassionate doctrine of justice could not solve the problem caused by the nature of the transaction, legal intervention was requested and executed. Usually, the person who wants to borrow money is so desperate that he is willing to accept the most unreasonable terms. See Kasumu v. Baba-Egbe (9156) 539 AD. The Indian Contract Act of 1872 made it clear that there was a fine line between the zero agreement and the illegal agreement. Here are examples of some of these contracts that are void from the start: Thus, if the parties enter into a contract with the aforementioned malicious intent, the contract is void even if the contract itself is valid.
It becomes questionable when electing a party that was not aware of such an intention of the other party. In addition, depending on the past and future transactions associated with it, a contract may become unlawful. But in any case, a contract is legally enforceable if it is not entered into for the purpose of circumventing the law. Here, for a better understanding of the statement, a distinction between null and void contract is necessary. Any party involved in an illegal contract is liable to the penalty established by law for that offence. 5. There is no provision to punish parties involved in void contracts. Agreements declared null and void are not punishable by law, but illegal agreements or contracts will result in penalties or penalties such as those provided by law for such offences. I have been working as an English teacher for many years as a translator of legal documents from Turkish to English or from English to Turkish. Today I must have seen differences between two similar words and when I connected to the Internet, I noticed this page.
I found this site very useful for using legal phrases The difference between void and illegal contracts is subtle but important. In 1872, the Indian Contract Act defined the boundary between null and void agreements. 3 min spent reading The law strongly disapproves of illegal contracts. For this reason, the conclusion of an illegal contract is a serious criminal offence punishable by law. Parties involved in an illegal contract face the wrath of the law when they enter into such a contract. These different types of illegal contracts can be divided into the following headings, namely: It is essential to understand the difference between them, as the terms can be quite confusing for laymen and at the same time indispensable for lawyers who defend such agreements or seek redress. A contract is defined in the Indian Contract Act of 1872 as “a legally enforceable agreement”. The parties may conclude a contract in compliance with all legal formalities and remain unenforceable because it is illegal. An unlawful contract is void if it was concluded with the malicious intention of circumventing the law or if it is fraudulent, if it has damaged or damaged a person or property, if it is immoral or because it performs these acts contrary to public order.
Thus, if the examination of an agreement is unlawful, it is qualified as an unlawful agreement (Article 28). In other words, an agreement becomes illegal if: Illegal agreements are void from the outset, so that agreements associated with the original agreement are null and void. Any contract by which a person in a transaction of a non-private nature seeks to obtain an undue advantage over others on the basis of illicit consideration is illegal and therefore void. In general, if a law is enacted specifically to protect a group of citizens or the public, any contract that violates such a law would be illegal and void. This protection is, for example, the Illiteracy Protection Act of 1958. Therefore, illegal V.A.C. agreements include a contract with uncertain terms, an agreement to hurt someone, or perform any other illegal act. In the case of an illegal agreement, all related agreements are invalid and the money received cannot be claimed or recovered.
No party to an illegal treaty can appeal to the courts, because it is based on the principle that “no dirty hand can touch the pure source of justice”. Here, the law distinguishes between “void contracts” and “unlawful contracts”. It is imperative to understand the difference between them, as the concepts can be quite confusing for laymen and at the same time essential for lawyers defending or seeking redress for such agreements. A contract is defined in the Indian Contract Act of 1872 as “a legally enforceable agreement”. The parties may enter into a contract in compliance with all legal formalities, but may not be enforceable because it is illegal.
