![According to section 2(d),
When at the desire of the promisor, the promisee or any other
person:
(a) has done or abstained from doing , or [Past
consideration]
(b) does or abstains from doing, or [Present consideration]
(c) promises to do or abstain from doing something [Future
consideration ] such act or abstinence or promise is
called a consideration for the promise.](https://image.slidesharecdn.com/4consideration-171001095429/85/Consideration-3-320.jpg)
Consideration
- 2. DEFINITION OF CONSIDERATION According to Pollock ,“Consideration is the price for which the promise of other is brought & the promise thus given for value is enforceable.”
- 3. According to section 2(d), When at the desire of the promisor, the promisee or any other person: (a) has done or abstained from doing , or [Past consideration] (b) does or abstains from doing, or [Present consideration] (c) promises to do or abstain from doing something [Future consideration ] such act or abstinence or promise is called a consideration for the promise.
- 4. EXAMPLE ‘P’ aggress to sell his car to ‘Q’ for Rs.50,000 Here ‘Q’s Promise to pay Rs50,000 is the consideration for P’s promise and ‘P’s promise to sell the car is the consideration for ‘Q’s promise.
- 5. LEGAL RULES REGARDING CONSIDERATION u/s 2 1. It must move at the desire of the promisor: 2. It may move from the promisee or any other person: 3. It may be an act, abstinence or forbearance or a return promise 4. It may be present, past or future.
- 6. 5. Consideration need not to be adequate but it must have some value 6. It must be real & not illusory 7. It must be something which the promisor is not already bound to do 8. It must not be illegal, immoral or opposed to public policy
- 7. 1. It must move at the desire of the promisor: It must be offered by the promisee at the desire or request of the promisor. An act done at the desire or request of the third party does not form a valid consideration.
- 8. 2. It may move from the promisee or any other person: Consideration may move from the promisee or any other person i.e. even a stranger.
- 9. 3. It may be an act, abstinence or forbearance or a return promise The following are good consideration for the contract: i. Forbearance To Sue ii. Compromise Of A Disputed Claim iii. Composition With Creditors
- 10. 4. It may be present, past or future. i. Past Consideration ii. Present Or Executed Consideration iii. Future Or Executory Consideration
- 11. 5. Consideration need not to be adequate Consideration need not to be adequate but it must have some value
- 12. 6. It must be real & not illusory There is no consideration in the following cases: i. Physical impossibility ii. Legal impossibility iii. Uncertain consideration
- 13. 7. It must be something which the promisor is not already bound to do A promise to do what one is bound to do ,either by general law or under an existing contract, is not a good consideration
- 14. 8. It must not be illegal, immoral or opposed to public policy Unlawful consideration includes any activities which: 1. Is forbidden by law. 2. Is fraudulent. 3. Is of such nature that, it will defeat a provision of any law. 4. Involves any injury to the person or property of another. 5. The Court regards it as immoral or opposed to public policy.
- 15. EXCEPTIONS OF THE RULE “NO CONSIDERATION NO CONTRACT” U/S 25 1. On account of Natural Love & Affection u/s 25(1) 2. For voluntary services u/s 25(2) 3. For promise to pay time-barred debts 25(3) 4. In the case of completed gifts 5. In the case of Agency u/s 185 6. Remission by the promisee, of performance of the promise.
- 16. 1. ON ACCOUNT OF NATURAL LOVE & AFFECTION U/S 25(1) Such agreements are enforceable even without consideration
- 17. 2. FOR VOLUNTARY SERVICES U/S 25(2) A promise to compensate wholly or in part, a person who has voluntarily done something for the promisor, is enforceable, even without consideration.
- 18. 3. FOR PROMISE TO PAY TIME-BARRED DEBTS 25(3) A promise by a debtor to pay a time barred debt is enforceable provided it is in writing and signed by the debtor or his agent.
- 19. 4. IN THE CASE OF COMPLETED GIFTS The rule no consideration no contract does not apply.
- 20. 5. IN THE CASE OF AGENCY U/S 185 To create an agency relationship consideration is not necessary.
- 21. 6. REMISSION BY THE PROMISEE, ON PERFORMANCE OF THE PROMISE U/S 63 A creditor can agree to excuse a whole debt or a part of it without any consideration for doing so. A promisee can agree to extend the time of performance of promise. example: X ows Rs. 500 to Y. X pays Rs. 100 & Y accepts in full satisfaction of his claim.