Voidable Contract

• Section 2(i) of the Contracts Act 1950 provides that : 
• " 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." 
• Therefore a voidable contract is valid and binding until the party entitled to avoid it opts to do so . 
• Section 19 (1) of the Contracts Act 1950 provides that : 
• "When consent to an agreement is caused by coercion , fraud or misrepresentation , the afreement is a contract voidable at the option of the party whose consent was so caused ." 

Example :

X, intending to deceive Y , falsely represents that the floor of his house is finished with high-quality marble , and thereby induces Y to buy his house . Y accepts X's offer . The contract is voidable at the option of Y .

Subsequently Y buys the house despite he discover that the floor finish is actually of ceramic tiles . Then the contract is not voidable on account of X's misrepresentation .


Section 19(2) of the Contracts Act 1950 provides that :

" 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."

 Example :
(Based on the above example ) Before Y buys the house , he may insist C to change the ceramic tiles to the high-quality marble which X has represented in his offer .

• A contract is not voidable merely because it was caused by one of the parties to ti being under a mistake as to matter of fact ( Section 23 )