Consideration in Contract Law Notes Pdf – Indian Contract Act 1872
we share consideration in contract law notes pdf which is one of the parts of the Indian contract act 1872. Consideration is important for CA foundation students. This web includes consideration definition, legal rule for a valid consideration, section 25 no consideration, no contract. Love & affection and so more.
we share consideration in contract law notes pdf which is one of the parts of the Indian contract act 1872. Consideration is important for CA foundation students. This web includes consideration definition, legal rule for a valid consideration, section 25 no consideration, no contract. Love & affection and so more.
Introduction:
- Quite pro quo = Something in Return.
- In the case of Currie vs. Misu: A valid consideration in the eyes of law may consist either in.
- Some right, interest, profit, or benefit accruing to one party. OR.
- Some forbearance, detriment, loss or responsibility given suffer or undertaken by the other party.
Section 2 (d) Consideration:
The term “consideration” is defined in section 2(d) of the Indian contract act, as under.
“When at the desire of the promisor, the promisee or any other party.(person), has done or abstained from doing OR, does or abstained from doing OR, promises to do or abstained from doing, Something, such an act or abstinence , is known as the consideration for the given promise.”
“When at the desire of the promisor, the promisee or any other party.(person), has done or abstained from doing OR, does or abstained from doing OR, promises to do or abstained from doing, Something, such an act or abstinence , is known as the consideration for the given promise.”
- Consideration is compulsory of contract.
- No consideration = No contract
- There can be stranger to consideration but not t contract.
- Every contract is a consideration.
- Every consideration is not a contract.
LEGAL RULES FOR A VALID CONSIDERATION
1.The consideration must be move at the desire of the promisor.
example:- A , the owner of the house, had mortgaged it. The house was occupied by B(son of A) and B’s wife C. A told B and C that the house would become their property if they paid off the mortgage debt in installment. B and C commenced payment and discharged the entire mortgage debt. Here , payment of mortgage debt by B and C is the good consideration for A’s promise to give the house to them.
2. It may move from the promisee on other people.
Example:- A an old lady, by a deed of gift, transferred certain landed property to B, her daughter.By the term of the gift deed, B was required to pay certain sum of money to C(sister of A),annually. On the same day, B excuted an agreement in favour of C promising to pay the stipulated amount. Later on , B refused to pay the amount to C on the plea that no consideration had moved from C to B. C sued B to recover the amount . It was held that C is entitied to recover the amount as the consideration was validly furnished by A , the old lady.
3. It may be positive act or negative act.
This means that the consideration can by a ‘promise to do something’ or ‘not to do something’.
4. Consideration may be past , present or future.
Under the English law, past consideration is not regarded consideration.
5. It need not be adequate.
Example: – P agreed to sell his horse worth rs.1000 for rs. 10 only. P said that his consent to the agreement was not freely given. In this case , the inadequacy of the consideration is a fact , which the court should take into account in considering wheather or not P’s consent was freely given.
6.The consideration must be real and illusory.
- There must be consideration but it is not necessaries that it must be equal to what is given up. It is more or less as far as there is consideration.
- The court not supposed looked into the adequancy or consideration.
- Inadequacy of consideration may be a ground to prove that a consent of a promisor is not free.
7.Consideration shall not be something which a promiser is already bound to do.
8. Consideration should not be illegal, immoral or opposed to public policy.
Section 25 : No Consideration, No Contract
- An agreement without consideration is void-ab-initio.
- ex nudo pactro non oritur action
The exception to Section.25:
- Cases where an agreement is valid even without consideration.
Section 25.(1) Love & Affection:
- If an agreement is entered into between parties standing too near relationship.
- Is made on account of natural love and affection and.
- Is made in writing and.
- Is registered under the law.
- The nearness of relationship does not necessarily imply natural love and affection. (eg. two brothers).
Section (2) Compensetion For Past Voluntary Services:
- Promised to pay a time-barred debt.
- In india as per law of limitation if any debt is unpaid and unclaimed for three years or more if become legally irrecoverable.
Section. 25(3) Promise to Pay A Time-Barred Debt.
- Only promised made in writing to repay the whole or the part of the time-barred debt is valid even without consideration.
Section 25(4) GIFT:
- Nothing in section 25 shall affected the validity of any GIFT actually made a donor and a donee.
Section 25(5) Agency:
- No consideration is required the creation of any an agency.
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