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CPT Paper 2 Mercantile Law Chapter 1 Unit 2 Consideration Mr. Varughese Thomas

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Page 1: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

CPT Paper 2 Mercantile Law Chapter 1 Unit 2 Consideration

Mr. Varughese Thomas

Page 2: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Consideration, Concept, Importance, Double aspect

Consideration from 3rd party to contract

Valid contract without consideration

Stranger cannot sue

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Page 3: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

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Contract Minus

Consideration

Unenforceable

Promise

Page 4: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Double aspect of consideration

Benefit to promisor

Detriment to promisee

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Page 5: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Price agreed to be paid by Promisee

for Obligation of Promisor

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Page 6: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

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At the desire of the Promisor

Promisee or any other person

Gives consideration of past / present / future

Page 7: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Consideration (need not be

adequate)

Done or abstained/

does or abstained/ to

do or abstained from doing

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Page 8: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

1. Promisor’s desire

2. From promisee or others

3. Executed or executory

4. Past consideration

5. Adequacy

6. Ought to legally perform

7. Not unlawful, immoral or opposed to public policy

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Page 9: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Types Executed (consideration consist in

performance) Executory (Consideration consist in

promise)

Can be from promisee or any person

Must move at the desire of promisor

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Page 10: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Moved by previous request

Has done or abstained

May be motive

Cannot be real for subsequent promise

Past services provided not gratuitous

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Adequacy

Need not be adequate

Should have lawfully some

value

Page 12: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Then that performance

is no consideration

And performance exceeds boundation,

it’s a good consideration

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Page 13: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Real Competent

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Page 14: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Immoral Unlawful Opposed to public

policy

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Page 15: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Consideration can be from 3rd

party

But 3rd party cannot sue

(i.e. Doctrine of privity of contact.)

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Page 16: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

TRUST – a beneficiary

FAMILY SETTLEMENT – terms in writing

MARRIAGE CONTRACT - female under HUF

ASSIGNMENT OF CONTRACT - benefits

ESTOPPEL: by liability acknowledgement

COVENANT TO LAND – successor of seller can

CONTRACTS BY AGENTS: in scope of authority & in principal’s name

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Page 17: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

Cases without consideration valid &

enforceable

Natural love & Affection

Past voluntary services compensation

Promise to pay time barred debt

Agency

Completed gift

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Page 18: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

• Benefit • Detriment

Consideration = price for promise of other party

Consideration = promisor’s desire must

• Executed • Executory Consideration may be

Past consideration = previous request = valid

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Page 19: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

In some case contract may be enforced by third party

“No Consideration, No Contract” but Exception are

Consideration must legal

Consideration need not adequate

Consideration may move Promisee Third party

Consideration - not one already legally bound

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Page 20: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

MCQ’s

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Page 21: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) Consideration must result in a benefit to both parties

(b) Past consideration is no consideration in India

(c) Consideration must be adequate

(d) Consideration must be something, which a promisor is not already bound to do

Answer: (d) Consideration must be something, which a promisor is not already bound to do

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(the points as mentioned in (a),(b) & (c) are not necessarily true

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(the points as mentioned in (b),(c) & (d) are exception to rule “No consideration, No Contract”

(a) Compensation for involuntary services

(b) Love & Affection

(c) Contract of Agency

(d) Gift

Answer: a) Compensation for involuntary services

Page 23: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) Must move at the desire of promisor

(b) May move from any person

(c) Must be illusory

(d) Must be of some value

Answer: (c) Must be illusory

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(points mentioned in (a),(b) & (d) are the legal requirements of consideration

Page 24: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) Promisor

(b) Promisee

(c) Any other person

(d) Any of these

Answer: (a) Promisor

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(The definition of consideration lays emphasis that it is upon the desire of the promisor, the consideration must move.

Page 25: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) Desires

(b) Wishes

(c) Consideration

(d) Promise

Answer: (c) Consideration

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(The aspects of ‘doing or not doing …..’ is contained in the definition of consideration)

Page 26: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) The services should have been rendered voluntarily

(b) The services must have been rendered for the promisor

(c) They must be in existence at the time when the services were rendered & must have intended to compensate the promise.

(d) All of the above.

Answer: (d) All of the above.

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(past voluntary services when cognized and compensated, the said service changes to good consideration)

Page 27: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) is expressed in writing

(b) of natural love and affection or the parties to the agreement stand in near relation to each other

(c) The document is registered under the relevant law

(d) All of the above

Answer: (d) All of the above

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(All above stated aspects are must in the case of agreement made out of natural love and affection, although it is without consideration)

Page 28: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) Consideration must be at the desire of promisor

(b) Consideration may be past, present or future

(c) Consideration need not be adequate, but real & backed with free consent

(d) Consideration should be always monetary

Answer: (d) Consideration should be always monetary

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Page 29: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) Consideration should move at the desire of promisor

(b) Consideration may move from promisee or any other person.

(c) Consideration may be past, present or future

(d) All of the above

Answer: (d) All of the above

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Page 30: CPT Paper 2 Mercantile Law Chapter 1 Unit 2 … · CPT Paper 2 Mercantile Law Chapter 1 . ... The document is registered under the relevant law (d) All of the above Answer: (d)

(a) A contract cannot confer any right on one who is not a party to the contract, evens though the very object of the contract may have been to benefit him

(b) A contract can confer right on one who is not a party to the contract, if the contract benefits him

(c) A contract always confers right on one who is not a party to the contract

(d) A contract can confer rights on strangers

Answer: (a) A contract cannot confer any right on one who is not a party to the contract, even though the very object of the contract may have been to benefit him

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