IRCRI Block 2 Legal Terminology Practice Test

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Which statement best defines a void contract?

It has legal effect from inception.

It is initially valid but may be terminated by one party due to a defect.

It has no legal effect from inception.

A void contract has no legal effect from the very start. It fails to meet essential requirements or involves illegal or impossible subject matter, so it can’t be enforced at any time. That’s why the statement that it has no legal effect from inception is the correct definition.

If a contract is initially valid but one party can void it due to a defect (like misrepresentation or duress), that describes a voidable contract, not a void one. A void contract cannot be ratified either; ratification cannot turn something that has no legal force into a binding agreement. Conversely, saying it has legal effect from inception would describe a valid contract, which isn’t the case for void.

It can be ratified by the parties at any time.