A contract that treats an agreement as if it never existed is referred to as:

A contract that treats an agreement as if it never existed is known as an 'ab initio agreement'. The term "ab initio" is a Latin phrase meaning “from the beginning.” In the context of contracts, when an agreement is declared to be void ab initio, it signifies that the contract is treated as if it was never created or valid from the moment of inception. All parties are considered to be in the same position as they were before the contract was made, effectively negating any obligations or rights that arose from it.

This concept is fundamental in contract law as it relates to circumstances such as illegality, lack of capacity, or mutual mistake, where the validity of the contract is fundamentally flawed. As a result, when a contract is void ab initio, it does not confer any legal effect; it's as though the agreement never took place, making it distinct from other types of contracts where obligations might still exist under certain conditions.