Which term describes a contract that is ineffective because it never existed?

A void contract is a term that refers to an agreement that lacks legal effect and is treated as if it never existed. This can occur for various reasons, such as when the subject matter of the contract is illegal or when one party lacked the capacity to enter into the agreement. Since a void contract cannot be enforced by either party, it is as if the contract was never created in the first place.

In contrast, an invalid contract typically refers to an agreement that may have some flaws but can potentially be declared invalid by a party if they choose to do so. A rescinded contract involves a legally valid agreement that has been canceled by mutual consent or by one party exercising a legal right, rather than being ineffective from the outset. A non-binding agreement may signify an understanding or intention between parties that is not legally enforceable, yet still acknowledges the existence of a potential contract rather than rendering it nonexistent.