Original Article: "Void (law)" http://en.wikipedia.org/wiki/Void_(law)
===========================================
Void (law)
From Wikipedia, the free encyclopedia
In law, void means of no legal effect. An action, document or transaction which is void is of no legal effect whatsoever: an absolute nullity - the law treats it as if it had never existed or happened.
The term "void ab initio", which means "to be treated as invalid from the outset," comes from adding the Latin phrase ab initio (from the beginning) as a qualifier. For example, in many jurisdictions where a person signs a contract under duress, that contract is treated as being "void ab initio".
Black's Law Dictionary defines void as:
Void. Null; ineffectual; nugatory; having no legal force or binding effect; unable, in law, to support the purpose for which it was intended.
Hardison v Gledhill 72 Ga.App. 432, 33 S.E.2d 921.
The dictionary further goes on to define void ab initio as:
Void ab initio. A contract is null from the beginning if it seriously offends law or public policy in contrast to a contract which is merely voidable at the election of one of the parties to the contract.
In practical terms, void is usually used in contradistinction to "voidable" and "unenforceable", the principal difference being that an action which is voidable remains valid until it is avoided.
The significance of this usually lies in the possibility of third party rights being acquired in good faith. For example, in Cundy v Lindsay (1878) 3 App Cas 459 a fraudster induced Messrs Lindsay & Co to sell to him a quantity of handkerchiefs. The fraudster then sold the handkerchiefs on to an innocent third party, Mr Cundy.
The fraudster was convicted, and the money was never recovered from him. Lindsay sued claiming ownership of the handkerchiefs.
If the contract of sale was held to be voidable for fraud, the fraudster could pass good title Mr Cundy (provided that the contract had not yet been avoided), and Lindsay & Co would only have recourse against the insolvent fraudster. However, if (as was in fact held) the contract of sale was void ab initio, then title did not pass, and Lindsay could claim back the handkerchiefs as their property, and Mr Cundy was left with only a claim against the insolvent fraudster.
In every case, third parties involved with Bad Faith in void or voidable contracts are not only affected by nullity, but may also be liable for statutory damages.
However, the right to avoid a voidable transaction can be lost (usually lost by delay).
These are sometimes referred to as "bars to rescission". Such considerations do not apply to matters affected by absolute nullity, or void ab initio.
===========================================
Original article: "Voidable" http://en.wikipedia.org/wiki/Voidable
=================================
Voidable
From Wikipedia, the free encyclopedia
In law, a transaction or action which is voidable is valid, but may be annulled by one of the parties to the transaction. Voidable is usually used in distinction to void ab initio (or void from the outset) and unenforceable.
The act of invalidating the contract by the party exercising its rights to annul the voidable contract is usually referred to either as voiding the contract (in the United States and Canada) or avoiding the contract (in the United Kingdom, Australia and other common law countries).
Black's Law Dictionary (relevant to US law) defines voidable as follows:
“ Voidable. That which may be avoided, or declared void; not absolutely void, or void in itself. It imports a valid act which may be avoided rather than an invalid act which may be ratified. United States v Price, D.C. Iowa, 514 F.Supp. 477,480 ”
Generally speaking, one party will have the right to elect whether to annul the transaction or to affirm it. The avoiding of a voidable transaction amounts to the rescinding it, or exercising a power of rescission, and as such is subject to the general law in that regard.
The right to rescind can be lost. In common law there are generally said to be four "bars" to rescission, any one of which will cause the agreement to no longer be considered voidable.
1/ delay
2/ affirmation (or ratification)
3/ restitutio in integrum being impossible
4/ third party rights
Although the law varies from country to country, most disputes relating to whether a transaction is void or voidable turn on the ability to transfer title to goods. In many jurisdictions, if a transaction is valid, but voidable, title to good still passes under the transaction, and the recipient may sell them with good title. If the transaction is void, no title passes, and the original seller can reclaim the goods.
