Difference between Void Agreement and Illegal Agreement

In Pakistan Contract Act, 1872 it is clear that, there exist a dainty line of distinction in the middle of void and illegal agreement. A void agreement is agreement which is not restricted under law, but an illegal agreement is entirely restricted by law and the parties of agreement can be punished for going into such an agreement. In this article we are going to explain the contrasts between two types of agreement i.e. void agreement and illegal agreement, which help you to understand these agreements.

Void Agreement

The expression “void” explains that no legal binding is there and “agreement” implies accord between parties regards to a strategy. To just, a void agreement is agreement which is not lawfully binding, that is an agreement which don’t have enforceability by law is void. A void agreement loses its lawful binding nature when pronounced void. Such form of agreement does not make any rights and commitment for parties, and additionally the parties don’t get any legitimate status. The transactions related to the void agreement will valid.

Illegal Agreement            

An illegal agreement is agreement that breaches any law or is criminal or is against any open strategy or improper, is an illegal agreement. These agreements called as void from just the start thus the collateral agreements are additionally void. The agreements are entirely disallowed by law, thus going into an unlawful agreement results the penalized the parties. Thusly, the parties are punished for the same under law.

Void Agreement Vs Illegal Agreement

  • Meaning:

A void agreement is an agreement which does not have legal enforceability.

An illegal agreement is an agreement whose formation is prohibited by the law of state.

  • Effect:

A void agreement turns into void when an agreement gives up its enforceability by the law.

An illegal agreement turns into void from the start of the agreement.

  • Prohibited:

A void agreement is an agreement which is not restricted or banned by the law of state.

An illegal agreement is an agreement which is restricted or banned by the law of state.

  • Punishment:

In void agreement, parties that are involved in void agreement are not accountable for any punishment under law.

In illegal agreement, parties that are involved in illegal agreement are accountable for punishment and they are penalized.

  • Scope:

The scope of a void agreement is nearly more extensive.

The scope of an illegal agreement is narrow.

  • Nature:

All void agreements are not said as an illegal agreement.

An illegal agreement can be said as a void agreement.

  • Object:

In void agreement, the object is not said as illegal.

In an illegal agreement, the object is said as illegal.

  • Collateral agreement:

Collateral agreement related to void agreement can be valid or can be void.

Collateral agreements related to an illegal agreement are void from the beginning of the agreement so they can’t enforceable.

  • Restoration:

In a void agreement, money paid can be claimed back.

In an illegal agreement, the money got must not return to next party or can’t be claimed.

Conclusion

From the above article we can conclude that a void agreement does not have legal enforceability while an illegal agreement whose formation is prohibited by the law. A void agreement turns into void when an agreement gives up its enforceability by the law but an illegal agreement turns into void from the start of the agreement. A void agreement is not prohibited, its scope is wider but an illegal agreement is prohibited and its scope is narrow. In void agreement, parties involve can’t be liable for punishment, money got can be claimed, object is not illegal, while in illegal agreements, parties involve are liable for punishment, money can’t be claimed, object is illegal. Collateral agreement related to void agreement can be valid or can be void however collateral agreements related to an illegal agreement are void from the beginning of the agreement so they can’t enforceable.