Law of succession

• Contract without having the legally required consent (free and full consent)

  The contract is subjected to invalidation
• Discussion on invalidation and cancellation includes

  • Meaning
  • Grounds
  • Entitled parties
  • Time limitation
  • Effect of invalidation and cancellation
• Discussion on invalidation and cancellation has incorporated


  • Effect of invalidation and cancellation when the whole contract or part of the contract is invalid and its effect on third parties whose right might be affected
  • Position of Ethiopian law of contract towards void and voidable contracts
• Invalidation of the contract

  Refers to the state of making an effective contract in-effective when it has a problem in its formation. Invalidation is related with the problem in the formation of the contract. Invalidation takes place when one of the parties wants to be free from the contractual obligation owing to a problem in the formation of the contract. Lack of capacity or lack of sustainable consent are the grounds that render a contract invalid.
• Legal effect of invalidation of the contract

  Restitution - Contracting parties shall be put to the place where they were before the formation of the contract. Compensation might be ordered when a contract is invalidated.
• Legal effect of cancellation of the contract

  Parties shall as far as possible be reinstated in the position which would have been existed, had the contract not been made. Acts done in performance of the contract shall be of no effect. Money received shall be reclaimed. However, an act that is made in performance of a contract is not subjected to invalidation if such invalidation affects the interest of third parties in good faith.
• Restitution and (or) compensation


  Cancellation paves the way for compensation that puts the victim in the place he would have been had the contract been performed. Compensation aims at to reward the benefits that could be drawn from the contract had it been performed.
• Main differences between invalidation and cancellation of contract

  • Ground for invalidation is defect in its formation, while ground for cancellation is non-performance
  • Different in their legal effects - invalidation results in restitution, while cancellation additionally entitles the party compensation
  • Unless the invalid contract is invalidated, the contract is upheld and becomes effective. Even though the contract might not be performed, the remedies of non-performance will be due
  • Anybody that wants it to invalidate the contract cannot invalidate a defective contract. It shall be the party who is affected by the invalid contract that can invalidate the contract.