web analytics

What is a void contract?

A void contract is a contract that cannot be enforced by law. Where a contract is found to be void, legally it is as if no agreement was ever made. A contract can be deemed to be void if it requires one person to perform an act that is illegal or impossible. A void contract does not need to be terminated because it was never legally binding in the first place.

A ‘voidable contract’, on the other hand, is a contract that may be rendered void. In such cases, the innocent party decides whether or not to enforce the contract and hold the other party to account. A voidable contract may exist, for example, where misrepresentation or undue pressure has been used to secure agreement.

The Anfi case

In the recent case, a timeshare contract between the Anfi Group and a Norwegian woman was found to be “Radically Null and Void” by the Spanish Supreme Court. While Spanish law is based on European law, the Spanish Parliament can modify directives to comply with local laws, custom and practice.

In this instance, a ‘perpetuity’ clause included in the timeshare agreement, was found to contravene Spanish law. While the decision could have significant repercussions for timeshare operators – paving the way for hundreds of people to come forward and claim that their contracts are also invalid – we need to consider whether the argument stands up under English Law.

Void contracts under English Law

Having been at the forefront of timeshare dispute resolution for several years, I have argued that contracts that continue in perpetuity are unfair, unenforceable and void under English Law. While this claim has yet to be tested before an English Judge, the argument has been sufficient to:

  • Discourage the pursuit of unpaid maintenance fees and,
  • Settle claims that have been commenced.

If under English law, a timeshare contract is found to be void, neither party should be able to sue the other. And, where money has been paid, it should be recoverable as it was not properly due (Chitty on Contracts).

While the defendant (in this case the timeshare operator) is likely to claim that any costs should not be refundable as the customer has in fact enjoyed the benefits of the timeshare to date, one would simply counter that the consumer has paid maintenance fees for the use of their timeshare, but that the capital payment made to the timeshare developer was never due under a void contract and should be returned.

In the absence of a legally binding contract, the purchaser simply occupied the property with the permission of the owner, but the developer should not be unjustly enriched at the expense of the consumer for this.

While the law in such matters can be extremely complicated, with many exceptions, bars, defences and qualifications, in theory at least there is a sound legal argument to find some timeshare contracts void under English law and seek restitution of monies paid.

The Anfi case certainly won’t hurt customers when pursuing this assertion. I have helped secure release from contracts on behalf of a large number of clients.

To find out if I can help you, at TESS, we offer a free, initial consultation to go over the details of your particular circumstances and advise you on whether you have a viable claim. With a no-nonsense, jargon-free attitude, we also discuss the range of available payment options up front, which may include no-win-no-fee, conditional fee and contingency fee agreements.

Posted on: 1st April 2015