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Differentiate between an illegal agreement and a void agreement
Let us understand the concept of an illegal agreement and a void agreement, before learning about their differences.
Illegal agreement
An agreement which violates any law with the nature of crime or any opposition of public policy or immoral is an illegal agreement.
Every illegal agreement is unlawful but not all the unlawful agreements are illegal. These agreements are strictly prohibited by law and parties who made these agreements can be penalized.
Illegal agreements are void ab initio, so agreements collateral to original agreement is void.
Void agreement
Meaning of the term VOID is no legal binding and term AGREEMENT is consent between two or more parties. Simply, void agreements don’t have legal binding.
If the agreement is declared void, then void agreement are losses of its nature of legal binding.
Agreements which are void are as follows−
- Made without considerations.
- Restraint trade.
- Do impossible acts.
- Objects are unlawful etc.
Differences
The major differences between the illegal agreement and void agreement are as follows −
| Illegal agreement | Void agreement | |
|---|---|---|
| Meaning | Creation of agreement is forbidden by law. | Agreement does not have legal enforceability. |
| Effect | Turns into void agreement at starting. | Agreement does not have legal enforceability. |
| Prohibited | Restricted by state laws. | Not restricted by the state laws. |
| Punishment | Accountable for punishment and penalized. | Not accountable for punishment and penalized. |
| Scope | Has narrow scope. | Has extensive scope. |
| Object | It is illegal. | It is not illegal. |
| Collateral agreement | It can’t be enforceable (because void at beginning). | It can be valid. |
| Restoration | Money paid can’t be claimed. | Money paid can be claimed back. |
| Nature | It is not a void agreement. | It is not an illegal agreement. |
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