A contract to do something prohibited by law is void. It is one where the whole transaction is regarded as a nullity. It means that at no time has there been a contract between the parties. Any goods or money obtained under the agreement must be returned. Where items have been resold to a third party, they may be recovered by the original owner.

A contract which is voidable operates in every respect as a valid contract unless and until one of the parties takes steps to avoid it. Anything obtained under the contract must be returned, insofar as this is possible. If goods have been resold before the contract was avoided, the original owner will not be able to reclaim them.

An agreement not enforceable by law is said to be void. [Section 2(g) of the Contract Act, 1872]

A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. [Section 2(j) the Contract Act, 1872]

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. [Section 2(i) the Contract Act, 1872]

A document void ab initio need not be set aside; it may be treated as non-existent. But a voidable contract is valid until it is avoided or spe­cifically set aside. In case of void document a person may rely on its invalidity as against himself without suing for its cancellation. But in case of document that is only voidable, the case is otherwise as the party cannot impeach it without having it cancelled. [Abdul Hamid vs. Dr. Sadeque All Ahmed, (1969) 21 DLR 507]