CONSIDERATION

The life blood of every contract.

 Learning Outcome

To make them understand the importance of

consideration and situations involving
exceptions
Definition
“Consideration is the price for which the
promise of the other is bought, and the
promise thus given for value is enforceable”

Example : A agree to sell his Car to B for Rs.

2,00,000 thus car is the consideration for B
and money is the consideration for A
Consideration May be :
• An act - means doing of something.
e.g. Guarantee by A to B for the payment of Price of goods
which B sell to C
• An abstinence – promising not to do
something .
e.g. tenant promise not to file a case
• A return promise – the promise of each party
is the consideration for each other
e.g. promise to sell the horse
 Legal Rules : Consideration
1. It must move at the desire of the promisor
(e.g : A saves B’s furniture From fire Without being asked to do so, he
cannot claim or demand payment for his services.)
Case : Durga Parsad v. Baldeo –
Durga Prasad v Baldeo Facts: B spent some money on the improvement
of a market at the desire of the Collector of the district. In consideration
of this D who was using the market promised to pay some money to B.
However, D failed to honor his commitment. Held: The agreement was
void being without consideration as it had not moved at the desire of D
2. It must move from promisee or any other person (as long as there is a
considerartion it is immaterial who furnishes it).
Case : Chinnaya v. Ramayya ( old lady made a gift to her daughter with a
direction to pay annuity to maternal uncle, uncle sue to recover)
3. It may be an act, abstinence or a forbearance or a return
promise.
- Forbearance to sue
Case: Debi Radha Rani v. Ram Dass
(husband wife compromised- forbearance)
- Compromise of a disputed claim
- Composition with creditors
4. It may be past, present or future.
- past (when consideration for present promise has
been given in past)
- present/executed (when consideration given
simultaneously )
- future/ executory (when consideration is to pass
subsequently to the contract)
5. It need not be adequate.
6. It must be real not illusory.
- physical impossibility (promises to put life into dead wife)
- legal impossibility
- uncertain consideration (A engages B for doing certain work
for a reasonable sum, reasonable sum is unenforceable)
- illusory consideration
e.g
I'll give you $1,000 to fix my car but only if I feel like it" and so
on...Basically it is a promise that the promisor is not obliged to
keep.
7. It must be something which the promisor is not already
bound to do.
( a promised to pay money to a police officer to investigate into
a case, invalid )
8.It must not be illegal, immoral or opposed to public policy.
A promises to obtain for B an employment in the public service
and B promises to pay Rs. 2 lakh