Introduction
This essay elaborates the concept of void and voidable contract in the Ethiopian legal frame work. The civil code stipulated capacity, consent, object and form in case of required as valid requirement for formation of legal contract. Defect of such element made a contract void or voidable.
Void Contract
It is a contract which has no legal effect and considered to be non-existent from the beginning. It has not binding effect on contracting parties. Impossible or illegal object and non-compliance of form required by law or parties makes the contract non-existent from the very beginning.
Parties require invalidation
According to Article 1808 (2) of civil code, a void contract is invalidated at the request of any contracting party or other interested third party.
Period of limitation vs Void contracts
While the void contract generates neither right nor duty; the period of limitation cannot be invoked. Therefore, Article 1810 and 1845 of the civil code stipulates that, period of limitation are not relevant to void contracts. Moreover the cassation bench decided that the invalidation of void contract shall not be restrained by period of limitation.
Voidable Contract
According to Article 1808(1) of civil code, a contract which is affected by a defect in the consent or incapacity of one party is a voidable contract. It is binding until it is avoided by the request of the party who is victimized by the contract. Therefore it may be “cured or killed” depending up on the option selected by victimized party from the two.
Parties requires invalidation
According to Article 1808(1) of civil code, in case of voidable contract only victim party can requires invalidation of contract. However the party entitled to invalidate has duty to confirm or invalidate a contract without delay.
Period of Limitation vs Voidable Contract
The right to avoid defective contract can only possible, if it is claimed with in time fixed by law. But, if such request avoiding this contract is not brought in the time fixed by law; the law takes away the shield and cleanses the defects automatically. Article 1810 (1) stated that invalidation of voidable contract shall be brought within two years from the ground for invalidation having disappeared.
Effect of Void and Voidable contract
Unfortunately civil code provides similar effect for both void and voidable contract i.e invalidation of contract. Article 1815(1) and 1817(2) stated that invalidation of contract reinstated the party in the position which would have existed, had the contract not been made or if reinstatement of parties in the original position is impossible, it invalidated by payment of damages or any other remedy which the court thinks fits. Beside this parties can only invalidate part of contract vitiated unless it affects the whole contract part. However we have to note that cannot invalidate contract if it affects the interest of third parties.
Conclusion
To sum up void and voidable contract is one ground of extinction of obligation. Voidable occurred when there is defect of consent and capacity, whereas void contract occurred when there is defect of object and form. Laws given similar effects for both, which is invalidation.
Reference
Civil Code of Ethiopia, 1960 (Proclamation Number 165/1960)
The Federal Supreme Court of Ethiopia, Cassation Decision, volume 13, file no. 69302, page 428-429
Law of Contract I: Teaching Material (2009)
About the Author:
Tsadiku Tsegaye, a 5th Year Law Student at Bonga Unversity.
Final Note: This article is reviewed and contributed through the team of editors of Justice Club-Legal Updates Team, Addis Ababa University, to ensure it meets Insight Magazine standards.
