Voidable Contracts – A Zimbabwean Perspective

In this week’s blog, we discuss the voidable contracts in the Zimbabwean context, you will recall in the first blog of this series, we discussed the requirements for a valid contract. In the event that one of the requirements is not satisfied the contract is termed to be invalid or void ab initio (from the start). On the other hand, where the contract requirements are satisfied, there is a valid contract in which each party must perform their stipulated obligations. However, a valid contract may be said to be unenforceable where it is a voidable contract, this occurs when there is a defect on the consent of one of the parties. In simple terms, a voidable contract, unlike a void contract, is a valid contract that may be either confirmed or disallowed at the option of one of the parties due to a defect in consent of one of the parties. However, at most, one party to the contract is still bound to the contract meaning the other party who is not bound to the contract may have it set aside (reject) the contract and claim restitution, at which time the contract becomes void. The most common instances where a contract becomes voidable under Zimbabwean law are due to misrepresentation/fraud, duress/ undue influence, and mistakes.

Misrepresentation/ fraud of the contract

Misrepresentation or fraud on a contract can be described when a party who has been induced to enter into a contract by misrepresentation or fraud of an existing fact and he or she is entitled to rescind the contract provided that the misrepresentation or fraud was material, was intended to induce him to enter into the contradict and did so induce him. In determining whether this will apply the critical question is whether there was an act of deception, fraud, or misrepresentation committed by the other party which induced the aggrieved party into entering into the contract.  The act must be identified and the aggrieved party must allege and show on the balance of probabilities that he or she entered into or committed to the contract because of being induced to do so by the alleged misrepresentation or fraud. For instance, where a party to a contract has made a material statement concerning a state of affairs, which is not true or which is fraudulent, which statement induced the aggrieved party to enter into a contract then a contract may be declared voidable.

Duress/ Undue influence

Duress and undue influence are common law doctrines found in Zimbabwean law.  A party alleging the use of duress and undue influence used to induce him to sign a contract is essentially saying that he/she was forced to do an act against his/her wish.  The burden of proof is always on the party alleging undue influence or duress to establish that he/she did not sign the document willingly. To succeed in such a claim one must prove the following;

1. Actual violence or reasonable fear;
2. The fear must be caused by the threat of some harm to the party.
3. The threat or intimidation must be unlawful or unjustified or contra bonos mores.
4. The threat must be of an immediate or imminent harm or evil; and
5. The pressure or means used must have resulted in prejudice or damage of some kind See the case of  Broadry v Smuts NO supra, at page 52 and R H Christie op cit, at page 368-377.

Mistake

Wikipedia, the Free Encyclopaedia, has defined a mistake under the law of contract as an erroneous belief, at contracting, that certain facts are true. It can be argued as a defence, and if raised successfully can lead to the agreement in question being found void ab initio or voidable, or alternatively an equitable remedy may be provided by the courts. The Courts have stated that there are mainly three classes of mistakes namely unilateral, mutual or common mistakes. A unilateral mistake is where one party has an incorrect perception while the other party is aware of the other party’s mistake while mutual mistakes are where both parties have the wrong impression of the other’s intention and both are unaware of the other’s mistake. Depending on which mistake occurred the general rule is that mistakes may render a contract void ab initio or void depending on the nature of the mistake involved. In instances where the mistake is material that relates to the subject matter of a contract and it has a bearing on the performance of an agreement, it renders the agreement void.

In conclusion, parties to a contract must be honest and truthful when entering into any agreement so as to avoid any of the instances discussed above being raised as this may result in the setting aside of the contract or a potential claim for restitution.  After all, the underlying principle of any contract is good faith. It is recommended that parties also do due diligence before entering into any agreement to ensure that they safeguard their interests.

Disclaimer;

The information and opinions expressed above are for general information only. They are not intended to constitute legal or other professional advice.