CONSI

DERATI
ON
Considerati
onisanessent
ialel
ementofaval
i
dcont
ract.Consider
ati
onmeanssomet
hingi
n
ret
urn.Itisthepr
iceagr
eedtobepaidbypr
omiseef
ortheobligati
onofpr
omisor
.

Accordi
ngtoPol
l
ock,“Consi
der
ati
oni
sthepri
ceforwhi
cht
hepr
omi
seoft
heot
heri
sbought
,
andthepromi
sethusgivenf
orval
uei
senfor
ceabl
e.”

According2(d)hasdefi
nedconsiderati
onasf ol
lows:“Whenatthepromisor,thepr
omi see
oranyot herper
sonhasdoneorabst ai
nedfrom doing,ordoesorabstai
nsf r
om doing,or
promiset odoortoabstainfr
om doi ng,something,suchactorabst
inenceorpromi seis
call
edaconsiderat
ionf
orthepromise.”

Accordi
ng Justi
ce Patter
son def
ines Consider
ati
ons,“
Consi
der
ati
on means somethi
ng
whichisofsomev aluei
ntheeyesoflaw……I tmaybesomebenefi
tstot
heplai
nti
fforsome
det
rimenttothedefendant
.”

Consi
der
ati
onhast
hef
oll
owi
ngcomponent
s:

 Anact(doi
ngsomethi
ng)orabst
inence(abst
aini
ngf
rom doi
ngsomet
hing)f
ormi
ng
consi
der
ati
onmustmoveatthedesir
eofpromisor

 I
tmaymov
efr
om pr
omi
seoranyot
herper
son

 I
tmaybepast
,pr
esentorf
utur
e

 I
tmustbesomet
hingt
owhi
cht
hel
awat
tachesav
alue

NoConsi
der
ati
on,
NoCont
ract
:

 Anypromisewit
houtconsi
der
ati
oncannotl
eadt
oav
ali
dcont
ractsi
ncei
twi
l
lbea
gr
atui
touspromi
se

 Notonlytheobj
ectofacont
ractshoul
dbel
awf
ul,butt
heconsi
der
ati
ont
her
ein
shoul
dalsobel
awful

ESSENTI
ALSOFVALI
DCONSI
DERATI
ON

1.Consider
ati
onmustmov eatt hedesi
reofthepromisor:I
tisthefi
rstsigni
fi
cantrul
e
astov al
i
dconsi der
ationthatitmustbeoffer
edbypr omiseeattherequestordesir
e
ofthepromisor.Unlessaper sonrequest
sanotherpersontodosomet hinghowcan
hebemadel iable.

Casel
awDur
gaPr
asadVsBal
deo1881

2.Consi
der
ati
onmaymovefr
om pr
omiseeoranyotherperson:Consi
der
ati
onmaybe
suppl
i
edeit
herbyt
hepr
omi
seoranyotherper
son(
thi
rd).

CaseLawChi
nnay
aVs.Ramay
ya1882

3.Consi
der
ati
onmaybepast
,pr
esentandf
utur
e:
  Pastconsider
ati
on:Pastconsider
ation i
sthatconsi
der
ati
on whi
ch has
al
readybeendoneforapr
esentpromise.

 Presentconsider
ati
on:Whentheconsi
derati
onisgivensi
mul
taneousl
yby
boththepart
ies,i
tiscal
l
edpr
esentpr
omise.Eg.Cashsal
e

 Fut
ureconsi
der
ati
on:
Thef
utur
econsi
der
ati
oni
sexecut
edi
naf
utur
edat
e.

4.Consi
der
ati
onneednotbeadequate:Considerati
onneednotnecessar
il
ybeequalin
val
uewit
hsomethinggi
ven.Thelawonlyinsistsonthepr
esenceofaconsider
ati
on,
i
tdoesnotobj
ectuponi
nadequacyofconsiderati
on.

5.Consi
derati
on mustbe r ealand notil
l
usory:The consider
ati
on mustbe real
,
competentandofsomev aluei
ntheeyesoflaw.Itmustnotbeill
egal
,i
mpossi
bleor
i
ll
usor
y.Theconsider
ati
onmaynotber ealbecauseof
:

 I
mpossi
bil
i
ty:
Impossi
bil
i
tymaybephy
sical
orl
egal
.

 Legalimpossibi
l
ity
:Il
l
egalconsi
der
ati
on means doi
ng an actwhi
ch i
s
prohi
bit
edbylaw.

 Uncer
tai
nty
:A pr
omi
se t
o pay an uncer
tai
n amount i
s not a good
consi
der
ati
on

 I
ll
usor
yconsi
der
ati
on

6.Consi
der
ati
onmusthavesomet
hingwhichthepr
omisorisnotal
readyboundt
odo:
It
i
sbecausetheper
for
manceofapre-
exi
sti
ngobli
gat
ionisnoconsider
ati
on.

Howev
ert
hef
oll
owi
ngar
egoodconsi
der
ati
on:

 For
bear
ancet
osue

 Compr
omi
seofdi
sput
edcl
aims

7.Consi
der
ati
onmustbelawf
ul:Theconsi
derat
ionmustbel
awful
.Ift
heconsi
derat
ion
i
sunlawf
ul,t
hecourt
sdonotallow anact
iononthecont
ract
.Theconsi
derat
ionis
sai
dtobeunlawf
uli
f:

 I
fiti
sfor
biddenbyl
aw

 I
tisofsuchanat
ure,
ifper
mit
ted

 I
tisf
raudul
ent

EXCEPTI
ONSTOTHERULE,
‘NOCONSI
DERATI
ON,
NOCONTRACT’

Considerat
ionbei
ngoneoft heessenti
alel
ement sofav al
i
dcontr
act
,thegeneralrul
eist
hat
‘
anagr eementmadewi t
houtconsider
ati
onisvoid.’Butt
herear
eafewexcepti
onst other
ule,
where an agreementwi t
houtconsiderat
ion willbe perf
ect
lyval
i
d and binding.These
excepti
onsareasfoll
ows:
1.AnAgreementmadeonaccountofnatur
allov
eandaf
fect
ion:Anagr
eementmade
wi
thoutconsi
der
ati
oni
senf
orceabi
l
ityi
f,i
tis

 Expr
essedi
nwr
it
ing

 Regist
eredundert
hel
aw f
ort
het
imebei
ngi
nfor
cef
ort
her
egi
str
ati
onof
document

 Madeonaccountofnat
ural
lov
eandaf
fect
ion

 Bet
weenpar
ti
esst
andi
ngi
nanearr
elat
iont
oeachot
her

2.Agreementt o compensateforpastv ol
unt
aryser
vice sec 25(
2):A promise to
compensate,wholl
yorinpartaper sonwhohasvol
untari
lydonesomethingforthe
promisor
,orsomet hi
ng which t
he promi
sorwas legal
lycompellabl
et o do,is
enfor
ceablewit
houtconsider
ati
on.

Thisrul
e,i
nfact
,recogni
sespastconsi
der
ati
onwhi
chwasgi
venwi
thoutr
equestor
desir
eofthepr
omisor.

3.Wri
ttenpr
omiset
opayati
me-
bar
reddebt:Apromi
semadei nwri
ti
ngtopayadebt
bar
redbythel
awofl
i
mit
ati
oni
senfor
ceabl
eevenwi
thoutconsi
der
ati
on.

4.Gi
ft
,et
c,act
ual
l
ymade:
Sect
ion25pr
ovi
dest
hatanygi
ftact
ual
l
ymadei
sval
i
d.

5.Tocr
eat
eagency
:Noconsi
der
ati
oni
snecessar
ytocr
eat
eanagency
.