What are the legal implications of a "void" contract?

A "void" contract is one that is not legally valid from the moment it is created. This means that it lacks any legal effect and cannot be enforced by either party involved. The concept of a void contract typically arises in situations where the agreement involves something illegal or where one of the parties lacks the legal capacity to enter into a contract, such as minors or individuals deemed mentally incompetent.

Since a void contract has no legal standing, neither party can seek to enforce the terms of the agreement or demand performance. This distinguishes a void contract from contracts that are voidable, which can be upheld at the discretion of one party under certain circumstances. Understanding the nature of void contracts is crucial in real estate and other legal agreements, as it helps individuals recognize when they may have entered into an agreement that holds no weight in legal terms. Thus, the answer that states a void contract has no legal effect and cannot be enforced by either party is accurate.