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Void and Voidable Contract

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  • Category: Contract

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Mary, a weak but mentally sound 87-year old woman, is in the front garden of her old weatherboard home. Duncan, a big man who was heavily tattooed and wearing leathers, parks his motorbike outside her garden and strikes up a conversation with Mary. He told Mary that: “I am a licensed painter and I could paint the exterior of your house for a good price – $8000”. Mary obviously felt intimidated by Duncan and hastily agreed. The next day Duncan arrived and over the next two days painted her house. During this time Mary discovered from her daughter’s inquiries that had Mary received competitive quotes for the painting work, the going rate for painting her house was about $4000. Her daughter also discovered that Duncan’s registration as a licensed painter had lapsed two weeks ago because he had forgotten to pay the renewal fee. The job is now complete and Duncan has asked Mary for $8000.

Question:

Is Mary contractually obligated to pay Duncan the $8000? Why?

Ans: No, Mary is not contractually obliged to pay Duncan the $8000. In the given case, there are circumstances that make this contract voidable. It is seen that Mary was intimidated by the Duncan presence and immediately agreed the Duncan’s offer. It seems that Mary was under the undue influence (even if Duncan has not such intention) while she concluded the contract because Duncan has represented himself in such a way that has probability to influence the mind of ordinary person and actually affects the person mind leading an old lady, Mary, to enter into the agreement. In addition, it is also mentioned that the Duncan’s has forgot to renew his license fee and had not provided the quotation as well.

Further Duncan has quoted the price as $8000 which according to the prevailing rate was $4000. It shows some ill intention (Mens Rea) of Duncan to deceit. We know that any contract done under the coercion, under influence, fraud and deceit is not automatically void but is consider voidable at the option of the party entitle to avoid it. Mary is not obliged to fulfill the consideration, i.e. to pay $8000 to Duncan if she considers this contract to be voidable. However she can pay $4000 to Duncan for whatever he has been done.

Which legal provision/s of the Contract Act 2056 is applicable to address this issue? Why is the provision applicable?

Ans: Let’s say Mary denied paying $8000 to Duncan. But Duncan refused to accept and filed the case in the court. The court can address the issue based on following Contract Act 2056

In Favor of the plaintiff- Duncan

According to Section 82 Subsection (1), Breach of Contract as Mary has breached the contract not giving $8000 since Mary accept the offer of Duncan and there was the meeting of mind before the contract so Mary is liable to pay stipulated amount $8000 to Duncan

According to the Section 83 Subsection (1), Compensation of Breach of Contract, aggrieved party, Duncan, can realize remaining $4000 as he had anticipated $8000 after the completion of the work.

According to the Section 85 Subsection (a), Right to recover the reasonable amount, aggrieved party, Duncan have right to claim payment in proportion to the work performed.

However, defendant, Mary, can defend the case according to the following legal provision According to Section 14 Subsection (a), Voidable Contracts the contract can be made void as Duncan has represented himself in such a way that has probability to influence the mind of ordinary person and actually affects the person mind leading an old lady, Mary, to enter into the agreement. According to Section 14 Sub Section (c) and (d-1), Voidable Contracts, the contract can be made void as Duncan have committed fraud and has intention to deceive old Mary by not offering quotation and directly asking her to pay $8000 while the prevailing rate in the Market was $4000. According to Section 13 Sub Section (j), Void Contracts, the contract can be considered void as the painting license of Duncan had already expired two weeks before he made the contract and he was not competent to conclude the contract.

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