Null And Void

Definition of "Null and void"

Written by

Michael Hall

William Raveis Real Estate

In legal terms, the definition of null and void (“void ab initio”) can describe an agreement that has no force or binding power. Therefore, it’s neither valid nor legally enforceable from the moment of its inception. Additionally, the parties can’t be held responsible for the terms incorporated in the contract. A typical real-life example is an unlawful clause in an argument, such as prohibiting the rental of property based on sex, race, or religion. However, exceptional rental markets in the US, respect the principles of human decency.

One should make a difference between a void and a voidable contract. The first one has never been legally binding and, thus, can’t be enforced at any future moment. Voidable contracts can lawfully still be enforced once legal irregularities therein are fixed.

Factors nullifying a void contract

What makes a contract null and void? There can be several reasons why an agreement is nullified. Suppose clauses unlawful in nature have been added to the contract. Furthermore, the agreement‘s object and scope can violate the principles of fairness, integrity, or public policy. For instance, a corporation harms a government antitrust law on labor abuse or environmental protection. Then, the courts shall nullify these void contracts.

The terms stipulated in a contract are often too ambiguous to fully comprehend or beyond the bounds of possibility to accomplish. Then, the parties involved may not understand the agreement’s meaning and implications. For instance, an intellectually disabled individual can’t comprehend the clauses within the contract, thus rendering the contract null and void. 

By default, contracts containing a fraudulent misrepresentation of facts are null and void.

Null and void contracts in real estate 

A real estate contract between a property seller and a buyer must conform with state regulations. It is binding in nature only after all parties meet every real estate contingency stipulated in the agreement. If either the buyer or the seller ignores carrying out a condition of sale, the contract is void.

Various reasons can cause a real estate contract to go south.

Buyer’s sale contingency

One of them is buyer’s sale contingency. It is a clause in the contract protecting a buyer’s wishes to sell their previous home before closing on the new property. The home acquisition moves forward if the buyer can sell by a specific date. Otherwise, the buyer is free to leave the new house purchase behind⁠.

Financial contingency

The house buyer must find a mortgage broker or lender to finalize a real estate contract. For this, they receive a specific period to apply for a loan. As previously mentioned, a homebuyer enjoys certain advantages, such as establishing interest-rate limits. If they can’t secure a loan, the real estate contract is void and null, and they can receive their deposit back. The same rule applies if the mortgage lender discovers that the real estate is worth less than the mortgaged amount.

Non-disclosure

Non-disclosure can also be a deal-breaker. The seller agrees to disclose all known property problems at the listing. Sellers must disclose many property issues, such as structural defects or legal matters. Not informing a buyer about toxic waste under the real estate is non-disclosure. It can result in a null and void contract. A non-disclosed easement argument will also affect the agreement. Additionally, the settlement is invalid once the seller proves not to be the genuine property titleholder.

A catastrophic house inspection

Local real estate agents recommend buyers hire a professional home inspector to conduct a thorough investigation of the new property. The seller can cover some of the expenses for repairs. Suppose the house inspection reveals severe defects, such as infestation, fungus, mold, or lead-based paint. Secondly, the homeowner chooses not to pay for the repairs. The buyer can then default on the contract. Thus, the covenant is null and void.

Also, making a will in real estate is essential. When a person in question doesn’t respect specific provisions, their real estate will is most definitely null and void.