What causes a contract to become void?

A contract becomes void when there is a fundamental change in circumstances or the law that renders the agreement impossible to perform or illegal. This situation typically arises when the subject matter of the contract becomes illegal due to changes in legislation or when unforeseen events fundamentally alter the assumptions that were essential for the contract's execution.

For instance, if a contract is based on a legal agreement to undertake a specific activity, and a new law makes that activity illegal, the contract is void ab initio, meaning it is treated as if it never existed from the outset. Similarly, if an event occurs that makes it impossible to fulfill the contract, such as a natural disaster destroying the subject of the contract, it may also lead to the contract being void.

In contrast, mutual agreement of the parties does not void a contract; rather, it represents a change or termination of agreement. Stakeholder agreements also do not impact the validity of a contract directly unless they relate to the terms of the original agreement. Voluntary withdrawal by a party can terminate the contractual obligation, but it doesn't inherently make the contract void; rather, it can result in a breach of contract if done without proper cause. Thus, the change in circumstances or law clearly establishes why a contract can be rendered void.