A contract void ab initio is treated as never having existed, unlike a voidable contract that is valid until avoided. The distinction affects restitution, third-party rights, and ratification.
Illegality and lack of capacity commonly produce void ab initio status.
Alternative Names:
From the Beginning|Void Ab Initio
Why it Matters?
The void and voidable distinction determines whether ratification is possible, since a void agreement cannot be ratified while a voidable one can be affirmed by the party entitled to avoid it. Third-party rights also differ, because a bona fide purchaser may acquire rights under a voidable transaction but not under a void one. Identifying which category applies determines the available remedies entirely.
Frequently Confused with
Related terms
Frequently asked questions
What distinguishes void from voidable?
How do third-party rights differ?
