This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Oregon. Leadbetter v. Hawley, 59 Or. 422, 117 Ac. 289 [rehearing denied, Leadbetter v. Hawley, 117 Ac. 505].
Utah. Adams v. Reed, 11 Utah 480, 40 Ac. 720.
1 See Sec. 1363 et seq.
2 See ch. XCV.
3 See ch. XLVI et seq.
4 See ch. LII.
5See ch. VI et seq.
6California. Knight v. Tripp, 121 Cal. 674, 54 Ac. 267.
Massachusetts. Pierce v. Bank, 129 Mass. 425, 37 Am. Rep. 371
New Jersey. Tarbox v. Grant, 56 N. J. Eq. 199, 39 Atl. 378.
New York. Ridden v. Thrall, 125 N. Y. 572, 21 Am. St. Rep. 758, 11 L. R. A. 684, 26 N. E. 627.
Ohio. Polley v. Hicks, 58 O. S. 218. 41 L. R. A. 858, 50 N. E. 809.
Wisconsin. McNally v. McAndrew, 98 Wis. 62, 73 N. W. 315.
7 See ch. XXXVI.
■ and the void. A valid contract is one which either party thereto may enforce, neither party having any right of avoiding liability. In a precise and technical sense there is no such thing as a void contract, since if there is a contract, the transaction can not properly be termed void; and if the transaction is void, no contract is thereby created. The expression "void contract," is, however, often used to denote that the parties to the transaction have gone through the form of making a contract; but that no contract has been made in law, by reason of a lack of some essential element of a contract.1 A void contract, therefore, creates no legal rights of any kind; either party thereto may ignore it at his pleasure as far as it is executory; and third parties may take advantage of its invalidity whenever their interests will be prejudiced otherwise. Usually a void contract being an absolute nullity is held to be incapable of ratification.2 A voidable contract is one in which one party has the privilege of making the contract either valid or void at his pleasure.3 The party to whom the law gives this choice possesses a right in the nature of an equitable election; and upon asserting the right, and making the contract either void or valid, the right is exhausted and can not afterwards be exercised even if the party wishes to change his mind and to take a different attitude in respect to the validity of the con-
1 United States. Ewell v. Daggs, 108 U. S. 143, 27 L. ed. 082.
Massachusetts. Allis v. Billings, 47 Mass. (6 Met.) 415, 39 Am. Dec. 744; Rodliff v. Dallinger, 141 Mass. 1, 55 Am. Rep. 439, 4 N. E. 805; Fairbanks v. Snow, 145 Mass. 153, 1 Am. St. Rep. 446, 13 N. £. 596.
New York. Blinn v. Schwarz, 177 N. Y. 252, 101 Am. St. Rep. 806, 69 N. E. 542.
Oregon. Denny v. McCown, 34 Or. 47, 54 Ac. 952.
Pennsylvania. Pearsoll v. Chapin, 44 Pa. St. 9.
Rhode Island. Rocks ▼. Cornell, 21 R. I. 532, 45 Atl. 552; Brown v. Bank, 88 Tex. 265, 33 L. R. A. 359, 31 S. W. 285; Cummings v. Powell, 8 Tex. 80.
2 Blinn v. Schwarz, 177 N. Y. 252, 101 Am. St. Rep. 806, 69 N. E. 542.
In Brown v. Bank, 88 Tex. 265, 33 L. R. A. 359, 31 S. W. 285, in an obiter it was said that a void contract might be "a mere moral obligation, serviceable only as a consideration to support a ratification thereof after majority."
3 Iowa. Van Shaack v. Bobbins, 36 la. 201.
Illinois. Barlow v. Robinson, 174 111. 317, 51 N. E. 1045.
Kentucky. Gist v. Smith, 78 Ky. 367.
Massachusetts. McDonald v. Sargent, 171 Mass. 492, 51 N. E. 17.
Nebraska. Englebert v. Troxwell, 40 Neb. 195, 42 Am. St. Rep. 665, 26 L. R. A. 177, 58 N. W. 852.
North Carolina. Hicks v. Beam, 112 N. Car. 642, 34 Am. St. Rep. 521, 17 S. E. 490.
Pennsylvania. Dolph v. Hand, 156 Pa. St. 91, 36 Am. St. Rep. 25, 27 AtL 114.
Texas. Cummings v. Powell, 8 Tex. 80.
West Virginia, Blankenship v. Ry. Co., 43 W. Va. 135, 27 S. E. 355.
Wisconsin. Johnson v. Insurance Co., 93 Wis. 223, 6T N. W. 410.
* tract. Ratification prevents subsequent disaffirmance,4 and disaffirmance prevents subsequent ratification.5 Before passing on to the further discussion of these words, it may here be noted that while the authorities and definitions generally limit voidable contracts to those in which one party may exercise his right of repudiating his liability, no reason appears why there may not be a voidable contract in which each party has on grounds peculiar to himself a right of avoiding the contract.6 The use of the terms void and voidable as indicating an accurate and reliable classification of contracts is always unsatisfactory and often misleading. In the first place the two words are often misused, being employed indiscriminately. The word void is the more frequently misused. In statutes, decisions and sometimes even in text-books, a contract is said to be void, when the context shows that it is merely voidable; that is, that one party to it may avoid it or make it valid at his option, but that the other party and all third persons are alike bound by it if the party having the right to avoid it sees fit not to do so.7 In the second place, even where the two terms are not confused, neither is accurate as to the ultimate effect of the transaction. A void contract may be simply ineffective for all purposes. On the other hand, title to property may pass as a part of the transaction. In this case the practical question is usually whether the former owner can recover his property or whether the law will leave the parties in the situation in which they have voluntarily placed themselves. A voidable contract may also have different meanings according to its legal effect. In some contracts, the party may avoid without restoring any part of the consideration received which has been lost, wasted or squandered. In others he can avoid only upon restoring everything which he has received under the contract. For these reasons we are often obliged to distinguish between contracts which are merely void and those which are illegal.8 It must further be observed that there is such a thing as a contract valid in itself, which may on account of special circumstances be unenforceable.9 Illustrations of contracts of this type will be given later. Most of such contracts fall within the terms of the Statute of Frauds.10 The term "unenforceable" is therefore wider than " void," since it includes all void contracts and some valid ones. So the term "void" is wider than "illegal": since all illegal contracts are void; while many are void that are not illegal.11 A negotiable instrument may be said to be "utterly void," and yet it may be valid in the hands of a bona fide holder.12 The term "invalid," which is sometimes used,13 is broad enough to include the void, the voidable and the illegal.
4 Hastings v. Dollarhide, 24 Cal. 195.
5 McCarty v. Iron Co., 92 Ala, 463, 12 L. R. A. 135, 8 So. 41T.
6 Drude v. Curtis, 183 Mass. 317, 62 L. R. A. 755, 67 N. E. 317.
7 United States. Ewell v. Daggs, 108 U. S. 143, 27 L. ed. 682.
Indiana. Bennett v. Mattingly, 110 Ind. 197, 10 N. E. 299, 11 N. E. 792.
Iowa. Van Shaack v. Robbins, 36 la. 201.
Massachusetts. Green v. Kemp, 13 Mass. 515, 7 Am. Dec 169.
Missouri. Kearney v. Vaughan, 50 Mo. 284.
Montana. Mutual, etc., Ins. Co. v. Winne, 20 Mont. 20, 49 Ac. 446.
New Hampshire. Brown v. Brown, 50 N. H. 538.
New York. Anderson v. Roberts, 18 Johns. (N. Y.) 515, 9 Am. Dec. 235.
Pennsylvania. Pearsoll v. Chapin, 44 Pa. St. 9.
Wisconsin. Bromley v. Goodrich, 40 Wis. 131, 22 Am. Rep. 685.