consideration

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 contractIt can be:A promise to do somethingA promise not to do somethingA benefit for the promiseeA benefit for a third person at the promisees direction

Legal rules as to considerationIT 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 PERSONConsideration 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 claimComposition with creditors

It may be past, present or futureA, 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 adequateSomething 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 impossibilityA charter party contained a clause that a particular ship would sail on a specified date that had already expired.Legal impossibilityUncertain considerationTo pay a REASONABLE amount

It must be something which the promisor is not already bound to do.Summons to appear in civil suitAdditional 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 exceptionsLove and affectionRegistered 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 servicesA promise to compensate a person who has already voluntarily done something for the promisor is enforceable even though without considerationA finds Bs purse and gives it to him. B promises to give A rs. 50. this is a contractA 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 debtCompleted giftCharitable subscription.