Voidable contract
Also called: Contract voidable at the option of a party
An agreement enforceable by law at the option of one or more of the parties but not at the option of the other or others. Section 2(i) of the Indian Contract Act, 1872.
Explained
Section 2(i) of the Indian Contract Act, 1872 defines a voidable contract as an agreement which is enforceable by law at the option of one or more of the parties to it, but not at the option of the other or others. It is a valid contract until the party entitled to avoid it chooses to do so. It differs from a void agreement under Section 2(g), which is not enforceable by law at all, and from a contract that becomes void under Section 2(j) when it ceases to be enforceable.
The main sources of voidability are defects in free consent. Under Section 19, an agreement whose consent was caused by coercion, fraud or misrepresentation is voidable at the option of the party whose consent was so caused; under Section 19A, the same applies to undue influence, and the court may set the contract aside absolutely or on just terms. The Exception to Section 19 provides that a contract caused by misrepresentation, or by silence fraudulent within Section 17, is not voidable if the party had the means of discovering the truth with ordinary diligence. A contract also becomes voidable under Section 55 where time is of the essence and a party fails to perform in time, and under Section 53 where one party prevents the other from performing.
When the party rescinds, Section 64 says the other party need not perform his promises, and the rescinding party must restore any benefit received. Under Section 66 rescission may be communicated or revoked in the same manner as a proposal. Mistake is treated differently: a bilateral mistake of fact essential to the agreement makes it void under Section 20, and a contract is not voidable merely because of a mistake of one party (Section 22).
A voidable contract can pass title until it is rescinded. Section 29 of the Sale of Goods Act, 1930 gives a good title to a buyer who buys in good faith without notice from a seller in possession under a contract voidable under Section 19 or 19A that has not been rescinded, and Section 178A of the Contract Act gives the same protection to a pledgee. Examiners test the definition, the void and voidable contrast, and these exceptions to the nemo dat rule.
What the law says
(i) An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract;
(j) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.
Section 2(i) defines voidable contract; 2(g) and 2(j) define void
When consent to an agreement is caused by coercion,*** fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.
Exception.—If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.
Voidability for coercion, fraud and misrepresentation
[When consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused.
Any such contract may be set aside either absolutely or, if the party who was entitled to avoid it has received any benefit thereunder, upon such terms and conditions as to the Court may seem just.
Illustrations
Voidability for undue influence
When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he have received any benefit thereunder from another party to such contract, restore such benefit, so far as may be, to the person from whom it was received.
Consequences of rescinding a voidable contract
The rescission of a voidable contract may be communicated or revoked in the same manner, and subject to the same rules, as apply to the communication or revocation of a proposal.
How rescission is communicated or revoked
When the seller of goods has obtained possession thereof under a contract voidable under section 19 or section 19A of the Indian Contract Act, 1872 (9 of 1872), but the contract has not been rescinded at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of the seller’s defect of title.
Title of a buyer from a seller under a voidable contract
Example
For example, A induces B by fraud to sell him a car. B may avoid the contract, but if A resells the car to C, who buys in good faith before B rescinds, C gets a good title under Section 29 of the Sale of Goods Act.
For the exam
- Voidable contract: enforceable at the option of one or more parties only (Section 2(i) ICA).
- Coercion, fraud and misrepresentation: Section 19; undue influence: Section 19A.
- No voidability if the truth could be discovered with ordinary diligence (Exception to Section 19).
- Rescission is communicated or revoked like a proposal (Section 66).
- Good faith buyer from a seller under an unrescinded voidable contract gets good title (Section 29 SGA).
36 questions in the Law Maker question bank use this term. Practise Contract Law questions
Related terms
- VoidHaving no legal effect. Under Section 2(g) of the Contract Act an agreement not enforceable by law is void, and under Section 2(j) a contract becomes void when it ceases to be enforceable.
- ContractUnder Section 2(h) of the Contract Act, an agreement enforceable by law. Section 10 lists what makes an agreement a contract.
- CoercionCommitting or threatening any act forbidden by the penal code, or unlawfully detaining or threatening to detain property, to anyone's prejudice, with intent to make a person enter into an agreement (Section 15, Contract Act).
- FraudUnder Section 17 of the Contract Act, specified acts by a party to a contract, or with his connivance, or by his agent, done to deceive the other party or induce him to contract.
- Undue influenceUnder Section 16 of the Contract Act, where one party is in a position to dominate the will of the other and uses that position to obtain an unfair advantage. The contract is voidable.
- Nemo dat quod non habetA person cannot transfer a better title than he himself has. In Indian law it is embodied in Section 27 of the Sale of Goods Act, 1930, subject to listed exceptions protecting good faith buyers.
Further reading
Checked 6 November 2026. Statutory text is quoted from the Bare Acts library, taken from India Code. See the full glossary.