c





 
 Ô  c



 ÷

 

‡ Naveen Varshney ‡ 06.
‡ Ruchita Vichare ‡ 07.
‡ Ameya Muktiboth ‡ 08.
‡ Shreya Raje. ‡ 09.
‡ Grazil George. ‡ 10.
 

‡ Section 2(d) of the Indian Contract Act defines

consideration as :
‡ ³When, at the desire of the promisor , the promisee or
any other person,
‡ Has done or abstained from doing or
‡ Does or abstains from doing or
‡ Promises to do or to abstain from doing something, such
act or promise is called consideration for the promise´.
‡ Ruchita
 Ô

 

‡ Consideration is one of the essential elements of a

valid contract.

‡ The term µconsideration¶ means µsomething in return¶,

i.e. quid ±pro-quo.

‡ Ruchita
‡
 Ô

 

‡ ³A valuable consideration in the sense of the law, may

consist either in some right , interest, profit or benefit
accruing to the one party or some forbearance ,
detriment, loss or responsibility given, suffered or
undertaken by the order.´

‡ Ruchita
 Ô

 

‡ When a party to an agreement promises to do something,

he must get ³something´ in return. This ³something´ is
defined as Consideration.

‡ ³Consideration is the price for which the promise of the

other is brought, & the promise thus given for value is
enforceable´.

Ruchita
 





 
u

 






‡ An act constituting consideration must have been done

at the desire or request of the promisor.

‡ Thus, an act done at the desire of a third party or

without the desire of the promisor cannot constitute a
valid consideration.
‡ Ameya
 





 
º 

 




An act constituting consideration may be done by

promisee himself or any other person ( i.e. stranger to
consideration). Thus, it is immaterial who furnishes
the consideration & therefore, may move from the
promise or any other person.

‡ Ameya
 





 
6 

  




The consideration which has already

moved before the formation of
agreement.

E.g. : X renders some service to Y at

Past Consideration : Y¶s request in the month of May. In
June , Y promises to pay X, Rs. 1,000/-
for his past services. Past services amt
to past consideration. X can recover Rs.
1,000 from Y.
Present consideration : The Consideration which moves
simultaneously with the promise, is
called present consideration.

E.g.: In case of cash sale, promise to

pay the price & promise to deliver the
goods are performed simultaneously.

Future consideration : The consideration which is to be moved

after the formation of agreement is
called future consideration.

E.g. : X promises to deliver certain

goods to Y after 10 days & Y promises
to pay after 10 days from the date of
delivery.
 





 
ñ 

 
  

‡ The consideration need not be adequate to the

promise but it must be of some value in the eye of the
law.
‡ It is understood in the sense of something in return &
that something in return and that something can be
anything, adequate or grossly inadequate.

‡ Ameya
 





 
£ 
 
   

‡ The consideration must be real & not illusory.

‡

‡ Sherya
 





 
 


 
 !




‡ The act constituting consideration must be something

which the promisor is not already bound to do
because a promisor to do what a promisor is already
bound to do adds nothing to the existing obligation.

‡ Sherya
 





 
0 " # 

‡ The consideration must neither be unlawful nor

opposed to public policy.

‡ Sherya
 
 Ô 
 


c 

 Ô 

 



‡ Though a stranger to consideration can sue because the

consideration can be furnished or supplied by any person
whether he is the promisee or not, but a stranger to
contract cannot sue because of the absence of privities of
contract.

‡ Sherya
 


u $  


The beneficiary ( i.e. the person for whose

benefit the trust has been created) may
enforce the contract.

Naveen
 


º $ % 




The person for whose benefit the provision is made

under family arrangements may enforce the contract.

Naveen
 


6 &$'#


The person who becomes an agent of third party by

acknowledgement or otherwise, can be sued by such
third party.

Naveen
 


ñ &
 

 $


Where a benefit under a contract has been assigned,

assignee can enforce the contract subject to all equities
between the original parties to the contract.

Naveen
 Ô  

‡ According to Section 10, consideration is one of the

essential elements of contract.

‡ According to Section 25, an agreement made without

consideration is void.
 

Ô  


 
 

u &
( &$$ 

 " 
&$
)$
º£*u+,

Such agreement made without consideration is valid if :

a) It is expressed in writing,
b) It is registered under law,
c) It is made on account of love & affection, &
d) It is between parties standing in a near relation to each
other.
 

Ô  


 
 

º 


)$
º£*º+,

Such promise made without consideration is valid if:

a) It is a promise to compensate (wholly or in part),
b) The person who is to be compensated has already done
something voluntarily or has done something which the
promisor was legally bound to do.
 

Ô  


 
 

6 
 - .
)$
º£*6+,

Such promise without consideration is valid if :

a) It is made in writing,
b) It is signed by the debtor or his agent,
c) It is related to a debt which could not be enforced by a
creditor because of limitation.
 

Ô  


 
 

ñ.

/
) ! 

$
º£,

The gifts actually made by a donor & accepted by the

donee are valid even without consideration. Thus, a
completed gift needs no consideration.
 

Ô  


 
 

£ &$)$
u0£,

No consideration is necessary to create an agency.