What term describes the avoidance of a contract from its inception, treating it as though it never existed?

The term that describes the avoidance of a contract from its inception, effectively treating it as though it never existed, is "ab initio." This Latin phrase translates to "from the beginning," indicating that the contract was void from the moment it was created, due to reasons such as illegality, lack of capacity, or mutual mistake.

This concept is important in contract law because it clarifies that certain contracts can be deemed invalid from their start, meaning that no legal obligations or rights ever arose under that contract. Consequently, this situation allows the parties involved to disengage without further legal implications as if the contract was never formed.

Other terms like "annulment" and "rescission" often refer to different processes. Annulment typically relates to declaring a marriage void, while rescission involves the cancellation of a contract that was valid at the outset for specific reasons, thereby undoing the agreement without treating it as though it never existed. "Nulled contract" is not a standard legal term used in this context, which can lead to confusion and does not have the same defined legal meaning as "ab initio."