We have seen, and in dealing with the formation of contract we shall see more in detail, that certain requisites are essential, and, if they are absent, the contract is said to be void. By this it is meant that it has no legal effect whatever. Clearly, in such a case, there is no contract at all, and it is a misuse of terms to speak of it as such. A transaction or agreement cannot be void and be called a contract, so it is more accurate to say that the transaction or agreement is void.
A voidable contract is not destitute of legal effect, but may be valid and binding. It is a contract that is capable of being affirmed or rejected at the option of one of the parties. It is binding if he chooses to affirm it, and is of no effect if he chooses to reject it. The other party has no say in the matter. Such is the case, as we shall see, with contracts into which one of the parties has induced the other to enter by means of fraud. The latter may repudiate the contract, or, if he sees fit, he may waive the fraud, and hold the former to his bargain.
It will seem, at first thought, that certain agreements said to be void are not so in fact. For instance, as we shall see, an agreement may be void on the ground of mistake, or, in a few cases, because of the infancy of one of the parties; but, if the mistake or infancy is not pleaded in the action to enforce it, the parties will be held bound. Such an agreement, however, is just as void as an agreement to do something which the law forbids. The cause of nullity is latent, but this does not alter the character of the transaction. It is void if the defendant chooses to prove it so.29
If the defendant in these cases may, at his option, avoid the contract, or let it stand, there would seem to be a certain unreality in the distinction between void and voidable agreements; but this is not so in fact. In case of voidable agreements there is a contract, though it is marked by a flaw; and the party who has the option may affirm it in spite of the flaw. Where, however, an agreement is void, it falls to the ground as soon as its nullity becomes apparent. It is incapable of affirmance. Another distinction is in the fact that in case of voidable contracts innocent third persons, acting in good faith, may acquire rights thereunder, and thereby cut off the right to avoid it; but no such rights can be acquired where the transaction is void.*0
A contract which is unenforceable cannot be set aside at the option of one of the parties to it. The obstacles to its enforcement do not touch the existence of the contract, but only set difficulties in the way of action being brought or proof given. The contract is valid, but because of these obstacles it cannot be enforced. Such is a contract, as we shall see, which fails to comply with some of the provisions of the statute of frauds, requiring writing, and so cannot be proved; or a contract which has become barred by the statute of limitations. The defect in these contracts is not irremediable. In the first it may be remedied by supplying the writing, and in the second by procuring a proper acknowledgment of the barred debt; but it will be noticed that the defect can be remedied only with the concurrence of the party to be made liable.
29 Anson, Cont (4th Ed.) 204. '■" Post, p. 295.