“You see? The contract’s legal, binding, and completely unbreakable, even for you.”
– Ursula, from the Little Mermaid
The term “void” means that a lack of existence and a nullity. The Oxford Law Dictionary defines “void” as having no legal effect and “void contract” as a contract that has no legal force from the moment of its making. Under this dictionary, “voidable contract” is defined as “a contract that, though valid when made, is liable to be subsequently set aside”.
Under Myanmar Laws, Section 2 (g) of the Contract Act (1872) provides that an agreement not enforceable by law is said to be void and Section 2 (i) of the Contract Act (1872) mentions that an agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract.
A void contract is legally considered as never having existed and as a nullity from the beginning. The creation of such a contract does not affect the legal standing of the parties involved, allowing them to act as if no contract was ever formed. By virtue of this, a void contract cannot be considered as a contract. In essence, a void contract has no legal effect which means neither party can enforce it. The defect which renders a contract void is irreparable, and it has no binding force. Hence, unless a new and independent contract is made, there will be no contractual relationship.
In contrast, a voidable contract is binding until it is invalidated by the party protected by law. It is a contract where one party has the power to void the legal relationship created by the contract through a clear expression of choice. If the affected party waives their right to void the contract and chooses to ratify it, their power to void the contract is extinguished, and the contract is treated as if it had no defect from the moment of ratification.
Profile of Author
Ingyin Hmwe @ Liliana [LL.B. Graduate of University of Yangon (2018), LL.M Candidate in Business Law (International Program) at Chulalongkorn University]
