For most business owners and individuals, entering into a contract is a routine exercise. Contracts are legally binding documents that are designed to protect the interests of all parties involved. However, not all contracts are created equal. Some are illegal, while others are void. It is important to understand the difference between these two types of contracts to avoid any legal issues that could arise in the future.
An illegal contract is one that is against the law from its inception. These contracts are considered null and void from the beginning, and they cannot be enforced by any court of law. Examples of illegal contracts include contracts that involve illegal activities such as drug trafficking, gambling, or prostitution.
On the other hand, a void contract is one that is valid at the time it is formed, but it becomes unenforceable at a later date due to certain circumstances. There are several reasons why a contract may be voided. For instance, a contract may be voided if one of the parties was not of sound mind at the time the contract was signed. Similarly, if one or both parties were coerced into signing the contract, it may be considered void.
Another reason why a contract may be considered void is if it violates public policy. This includes contracts that involve discrimination based on race, gender, or religion. Contracts that are overly restrictive or overly broad may also be considered void if they limit an individual`s freedom or rights.
It is important to note that a contract that is illegal or void cannot be enforced by any court of law. It is, therefore, crucial to ensure that any contracts you enter into are legal and enforceable. To do this, it is recommended that you seek the services of a legal professional who can provide expert advice on the legality of any contract you intend to sign.
In conclusion, understanding the difference between illegal and void contracts is crucial when entering into any business or personal agreement. An illegal contract is against the law and is not enforceable, while a void contract is valid at the time of formation but becomes unenforceable later on due to certain circumstances. It is advisable to seek legal advice when entering into any contract to avoid any legal issues that might arise in the future.