CONSIDERATION
When a party to an agreement promises to do
something, he must get something in return.
This something is defined as consideration.
Consideration must flow from both sides of the
contract
It can be:
A promise to do something
A promise not to do something
A benefit for the promisee
A benefit for a third person at the promisees direction
LEGAL RULES AS TO
CONSIDERATION
IT MUST MOVE AT THE DESIRE OF THE PROMISOR
A saves Bs goods from fire without being asked to do so. A
cannot demand payment for his services.
D constructed a market at the instance of the Collector of a
District. The occupants of the shops in the said market promised
to pay D a commission on articles sold through their shops. Later
on they failed to pay commission and D filed a suit for the
recovery of same.
There was no consideration because the money was not spent by
the plaintiff at the request of the defendants, but voluntarily for
a third person and thus the contract was void
IT MAY MOVE FROM THE PROMISEE OR ANY OTHER
PERSON
Consideration even may move from a stranger.
As per Indian law it is immaterial who has furnished
the consideration.
But the stranger to the consideration will be able to
sue only if he is a party to contract.
A lady, by a deed of gift transferred certain property
to her daughter, with a direction that the daughter
should pay an annuity to As brother. On the same
day the daughter executed a writing in favour of her
uncle, agreeing to pay the annuity. Afterwards, she
declined to fulfill her promise saying that no
consideration had moved from her uncle.
Held As brother was entitled to maintain the suit.
It must be an act, abstinence or forbearance
or a return promise.
Forbearance
to sue.
A husband in consideration of his wifes promise to forbear
from filing a suit, agreed to pay her maintenance
allowance . It is a valid contract
Compromise
of a disputed claim
Composition with creditors
It may be past, present or future
A, a minor was given the benefit of certain
services by the plaintiff, who rendered those
services, not voluntarily but at the desire of A
These services were continued even after
majority at the request of A Subsequently A
promised to pay an annuity to the plaintiff.It was
held that the past consideration was a good
consideration
D
promises to deliver certain goods to P after a
week. P promises to pay after a fortnight. The
promise of D is supported by the promise of P.
It need not to be adequate
Something
in return need not necessarily be equal in
value to something given.
The courts do not exist to repair your bargains
A agrees
to sell my 2006 BMW 525 to Alex for
Rs 2000.The consideration is Rs 2000 in
exchange for the BMW .The court will not
look at whether the value is enough; and the
consideration is sufficient
Element
of free consent
It must be real not illusory.
Physical
impossibility
A charter party contained a clause that a particular ship
would sail on a specified date that had already expired.
Legal
impossibility
Uncertain consideration
To pay a REASONABLE amount
It must be something which the promisor is not
already bound to do.
Summons
to appear in civil suit
Additional sum to an advocate if the suit was
successfull
It must not be illegal, immoral or opposed to public
policy.
A promises to obtain employment for B in the public
service and in return B promises to pay Rs 50000
A CONTRACT WITHOUT
CONSIDERATION IS VOID EXCEPTIONS
Love and affection
Registered
agreement based on natural love and affection
between near relatives is enforceable even if it is without
consideration.
An
elder brother, on account of natural love and
affection, promised to pay the debts of his younger
brother. The agreement was put to writing and was
registered. Held : The agreement was valid.
F for natural love and affection promises to give his son S
Rs. 1000. F puts his promise to S in writing and registers
it. Held it is a contract.
A
Hindu husband by a registered document, after referring to
quarrels and disagreements between himself and his wife,
promised to pay his wife a sum of money for her maintenance
and separate residence. it was held that the promise was
unenforceable
Compensation for voluntary services
A
promise to compensate a person who has already
voluntarily done something for the promisor is
enforceable even though without consideration
A finds Bs purse and gives it to him. B promises to give
A rs. 50. this is a contract
A says to B at the risk of your life you saved me from a
serious accident. I promise to pay you Rs. 1000. there is
a contract between A & B.
Promise to pay a time barred debt
Completed gift
Charitable subscription.
