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CONSIDERATION :-

It is defined in the following words : "When at the desire of the promiser the promisee has done or

abstained from doing or does or abstains from doing such act is called a consideration for the promise."

In other words "Consideration is a reward accepted or given in return for the promise. it is a fact that

without consideration agreement is not valid."

ESSENTIALS OF CONSIDERATION

1. By Promisee :-

Consideration by the promisee or any other person.

2. Desire of the Promisor :-

It should be given at the desire of the promisor.

Example 1 :-Mr. Shah agrees to sell his "house for Rs. Twenty lac to Mr. Amit. Now Mr. Amit promises to

pay the such amount is the consideration for Mr. Shah's promise.

Example 2 :-Mr. Donalnd a promisor agrees with Mr. Kim that if he will abstain himself from filling a suit

then he ( Mr. Donald ) will pay him Rs. Ten thousand. In this situation Mr. Kim abstained from filling suit is

a consideration for Mr. Donald.

3. Consideration May Be Past, Present or Future :-

Consideration is an act which has already been done or in progress or to be done in future at the desire

of the promisor.

i. Past Example :-Mr. Nash lost his car and Mr. Frank a finder delivers it to him. Mr. Frank can not

demand payment of his services due to the past consideration.

ii. Present Example :-Mr. Ali sells a house to Miss Sana. She pays its price immediately. It is called

present consideration.

iii. Future Example :-Mr. Shah promises to deliver a shop to Mr. Khan after a one month for Rs. 1 lac

upon the promise of Mr. Khan to pay the agreed price at the time of delivery. It is called future

consideration.

4. Must be Real :-

Consideration must be realistic and competent. If consideration is physically impossible, illegal and

uncertain it will be not valid.

5. Needs Not To Be Adequate :-

The law only insists on the presence of consideration and not on its adequacy. Inadequacy may create

the doubt about the free consent of two parties but it is valid if free consent is proved.

Example :-Mr. Kullo agrees to sell his house for Rs. 25 lac. If the consent of Mr. Kullo is free then

agreement is valid contract, without consideration.

6. Lawful Consideration :-

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Consideration should be unlawful because it can not form a valid contract. It should not be against the

public policy.

EXCEPTIONS :-

No doubt without consideration agreement is void but it has also exceptions which are following:

1. Case of Love :-

Consideration is not compulsory if an agreement made between the parties for natural love and affection.

2. Case of An Agent :-

The contract of agency requires consideration, where the contract is a promise to appoint an agent.

3. Case of Voluntary Services :-

In case of compensation forvoluntary services there is a relaxation of consideration.

4. Case of Donation :-

Agreement made for donation is not enforceable for want of consideration. A promised amount can not belegally recovered where the promisee has done nothing on the basis of promise.

Example :-If Mr. Shah promised to donate one lac for the repair of college.College principal did nothing

for repair. Mr. Shah refused to pay. On a suit by principal it was held the Mr. Shah is not liable because it

did not result any loss to promisee.

5. Case of Gift :-

In case of gift there is no need of any consideration. According the law any gift which is actually delivered

will be valid. It cannot be demanded back on the ground that there was no consideration for him.

6. Extension in Time Limit :-

There is no need of any consideration if agreement is made to extend time for the enforcement of the

contract.

Example :-Mr. Chun agrees to construct the shop for Mr. Raju within one year against Rs. 20 lac. Later

on the request to Mr. Raju to extend the time period for the completion of the shop. Mr. Raju accepts the

request. It is a valid agreement without consideration.

7. Case of Time Barred Debt :-

If a debtor promises to pay a time barred debt, then there is no need of consideration. The promise must

be in written and signed by the debtor or his agent.

8. Contract Under Seal :-A contract without consideration is valid if it is made under seal.

Example :-Mr. Nehra and Mr. Adit enter into agreement by writing the partnership deed to form a

partnership. This contract is valid.

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