If an agreement appears to be a contract but there has been some defect as to its configuration, the contract is said to be ex facia valid. In cases like this the contract will be regarded as void or voidable, and as both these are similar it has to be noted there are vital realistic distinctions between them.

A contract will be classed as void where it is seen that there had been no consensus between the parties. For this to be the case, the factor must be very serious. It is fundamental that a consensus between the parties is reached before a contract can be configured. Therefore were it is void a contract will never have existed. This then reflect on the legal side of the contract in which they are treated as though they have never existed. Example (a contract, for the sale of goods where the parties discover that they have not agreed on the same issue).

When there is a flaw in the configuration of a contract but is not so essential as to prevent consensus between the parties, this contract will be classed as voidable.

The contract will have been formed and remain in existence until one of the parties takes action to cancel the contract. The cancellation of this type of contract may be classed as being annulled, avoided or set aside. In this case it is possible that the parties may ignore the impurities of the contract and just carry on with the contract as such.

A contractual performance is where when a valid contract is formed there will be at least one party bound to carry out an action as is specified under the contract.

There are certain, standards that have to be met in order for any party to take part in a contract. However there are a few situations that do not have contractual capacity:

Young Persons. The general rule, to which there are exceptions, states that persons under 16 have no contractual capacity whereas persons over that age have full contractual capacity. However the Age of Legal Capacity (Scotland) Act 1991 gives a certain protection to people aged over 16 but under 18 by the provision that the Court of Session or a sheriff court may, if applied to, set aside a transaction entered into while the person was of or over 16 but under 18 provided the transaction was a `prejudicial transaction”.

Intoxicated Persons. Drunkenness is not a ground on which a contract can be made void or voidable unless the drunkenness has reached such as stage that the person no longer knows what they are doing and is therefore incapable of giving the consent essential for a contract.

Enemy Aliens. An enemy alien is a person of any nationality, who, in time of war, voluntarily resides or carries on business in an enemy country. A contract entered into with an enemy alien is illegal. Contract already in place at the declaration of war become void if they involve interaction with enemy aliens, but at the end of war the rights of the former enemy aliens revive. The result of this is that they may, for instance, sue for the recovery of sums due to them under the pre-war contract.

Corporate Bodies. The general principal is that the contractual capacity of a corporate body depends on its constitution. A corporate body created by statute cannot enter into any contracts except those expressly or impliedly authorised by the statute concerned.