NATIONAL LAW UNIVERSITY ODISHA

CONTRACT LAW-I

CONSIDERATION AS AN ESSENCE TO
CONTRACT

SUBMITTED TO:
Mayank Tiwari
(Assistant Professor)

Nanditta Batra
(Professor of Contract)

SUBMITTED BY:
Mohit (16BA061)
PriyeshVerma (16BA081)
Sujay Kumar Lal (16BA108)
Trilok Chand (16BA113)

Page 1 of 27
 ACKNOWLEDGEMENT

We wouldclike to express our special thanks of gratitude to our teacher Mr. Mayank
Tiwari and Ms. Nanditta Batra as well as our Vice Chancellor Prof. Srikrishna Deva Rao
for giving us this opportunity of doing a project on Consideration as an essence to contract,
which also helped us in doing a lot of Research and we came to know about so many new
things and we are really thankful to them. Secondly we would also like to thank our friends
who helped us a lot in finalizing this project within the limited time”frame.

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 TABLE OF CONTENTS

S. No. Content Page No.

1 Research Methodology 4

2 Research Questions 5

3 Chapter 1 – Introduction 6

4 Chapter 2 – Privity to contract 10

Chapter 3 – Consideration May

5 Be Past, Present Or Future 15
(Executory)
Chapter 4 – Exceptions When The
6 Agreement Is Valid Without 20
Consideration
7 Conclusion 25

8 Bibliography 27

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 RESEARCH METHODOLOGY

Research“methodology is doctrinal in kind and mainly based on sources including books, articles
and internet searches. Editorials on the topic are also going to be an integral source of ”our
research.

Mode of citation is in “OSCOLA” format.

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 RESEARCH QUESTIONS : -

1) To“understand the role of Consideration in a Contract.”

2) To“gain knowledge about Privity of Contract.”

3) What“are the different types of Consideration?”

4) What“is the function of promise for a Consideration in a Contract? ”

5) What“are the exceptions when the Agreement is Valid without Consideration? ”

HYPOTHESIS:-

Although“consideration is an important part in a contract. But there are few

exceptions when the contract can be performed without the consideration also
which are discussed further in the project.”

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CHAPTER : 1 - INTRODUCTION TO CONSIDERATION

The section 25 of the Indian Contract Act, 1872 openly declares that “an agreement made
without consideration is void…”1In other words the presence of consideration is an essential for
a contract to be valid.2 In England too “promises without consideration are not enforced, because
they are gratuitous”.3In England the contracts are divided into two categories:

1. Contracts“under seal, or contracts in the form of a deed. Such contracts are valid even
without consideration.”
2. Simple“contracts or parol contracts. For validity of such contracts the presence of
consideration is needed.4”

Consideration“in simple words means something in return of a promise which may either be
benefit gained by one party or something lost by the other. So generally there can be no doubt
that for a valid contract, there must be consideration, and also free consent.5”

Definitions of Consideration

According to Blackstone6: “Consideration is the recompense given by a party contracting to the

other.” Or the price of the promise.Sir Fredrik Pollock summarized the position of words adopted
by the House of Lords in1915: “An act of forbearance of one party or the promise thereof is the
price for which the promise of the other is bought, and the promise thus given for value is
enforceable.”7

1
The section also provides some exceptions to the rule.
2
Section 10.
3
See HEATH J in Lee v Muggeridge, (1813) 128 ER 559.
4
'Consideration' (En.wikipedia.org, 2017) <https://en.wikipedia.org/wiki/Consideration> accessed 19 April 2017.
5
Sunitibala Devi v Manindra Chandra Roy, A.I.R.1930 P.C.217.
6
Commentaries.
7
Pollock On Contracts (13th Ed.) p. 133.

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 The definition given in Curre v Misa8by Lush J is widely accepter and stated on the
next page:
“A valuable consideration in the sense of the law may consist either in some right,
interest, profit or benefit accruing to the one party, or some forbearance, determent, loss,
or responsibility given, suffered or undertaken by the other…”

Definitions of Consideration under Section 2(d)

Section 2 (d), The Indian Contract Act, 1872 defines consideration as given under:
“When, at the desire of the promisor, the promise or any other person has done or
abstained from doing, or does or abstains from doing or promises to do or abstain from doing
something, such act or abstinence or promise is called a consideration for the promise.”

Essentials of Consideration
The“definition of consideration highlights the following essentials to be fulfilled for the
presence of a valid”consideration:

1) Consideration to be given “at the desire of the promisor”

2) Consideration to be given “by the promise or any other person”
3) Consideration“may be past, present or future, in so far as definition says that
the”promisee:
a) Has done or abstained from doing, or
b) Does or abstains from doing, or
c) Promises to do or to abstain from doing, something.
4) There should be some act, abstinence or promise by the promisee, which constitutes
consideration for the promise.

These essentials have been discussed in detail in the project.

8
(1875) LR 10 Ex 153, 162.

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 Consideration at the Desire of the Promisor

The“definition of consideration under section 2(d) clearly emphasizes that the consideration
must be given at the desire of the promisor, rather than merely voluntary or at the instance of
some third”party. In the case DurgaParsad v Baldeo.9

The offended party, on the request of the Collector of the town, worked at his own
particular cost, certain shops in a bazaar. The shops came to be involved by the
respondents who, in light of the offended party having used cash in the development,
guaranteed to pay him a commission on his articles sold through their office in the
bazaar. The plaintiff‟s activity to recoup the commission was rejected. It was held in light
of the fact that as the development had not been done according to the craving of the
respondents, yet the request of the gatherer. Henceforth, the thought was not legitimate
and the respondents not at risk for the same.

Consideration by Promisee or any other Person (Privity of

Consideration)

According to the Indian Law,10consideration might be given by the promisee or some other
individual. It implies that the length of there is a thought for a guarantee, it is irrelevant who has
outfitted it. It might move from the promisee, or, if the promisor has no complaint, from some
other individual. Yet, in English Law the position is distinctive, here the thought must move
from the promisee himself.11For instance, A guarantees to give his watch to B and a thought of
Rs.10000 for the same is given to A by C and not B himself.This won't be a substantial contract
in England however in India it will be legitimate as the section 2(h) plainly expresses that at the
longing of the promisor, the promisee or some other individual may“give thought. This can be
additionally comprehended on account of Chinnaya v Ramaya.12For this situation A, an old

9
(1880) 3 All. 221, Oilfield J at p. 228.
10
Section 2(d); Indian Contract Act, 1872
11
Thomas v. Thomas, (1842) 2 Q.B. 851; Tweedle v Atkinson, (1816) 1 B.&S. 393.
12
(1882) 4 Mad. 137.

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woman allowed her bequest to her little girl (the defendant) with a heading that the girl ought to
pay an annuity of”Rs.653, to A’s siblings (the offended parties). Around the same time, the
respondents made a guarantee with the offended parties that she would pay the annuity as
coordinated by A. The respondent neglected to pay the stipulated aggregate. In an activity
against her by the offended parties she battled that since the offended parties themselves had
outfitted no thought, they had no privilege of activity. The Madras High Court held that in this
understanding the thought had been outfitted by the defendant’s mother and that it was sufficient
thought to authorize the guarantee between the offended party and the respondent.

In the above case it can be seen that An enters in an agreement with B, yet A himself has not
given any thought to B, but rather the thought hosts been given by third get-together i.e. C to B.
In spite of the fact that A will be an outsider to thought, he can in any case authorize the
agreement against B. One needs to recollect this is just valid under Indian Law and the
circumstance is distinctive under English Law where the thought can just move from the
promisee and an outsider to the thought in no condition can keep up any activity.13

13
'Embedded System Development-Arduino UNO' (Slideshare.net, 2017)
<https://www.slideshare.net/hanusultania/embedded-system-developmentarduino-uno> accessed 5 April 2017.

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CHAPTER : 2 - PRIVITY TO CONTRACT

The Doctrine of Privity of Contract in basic words implies that exclusive those people
who are gatherings to the agreement can uphold the same. An outsider to the agreement can't
uphold an agreement despite the fact that the agreement may have been for his advantage. To
clarify it with an illustration, if there is an agreement amongst An and B whose advantage has
been presented upon C, C can't document a suit to uphold the agreement in light of the fact that
lone An and B are the gatherings to the agreement and C is an outsider to the same.

This govern must be separated from the lead expressed before as indicated by which in
India a man who is an outsider to the thought can sue. This does not influence the rule of Privity
of Contract.

English Law

In Tweedle v Atkinson14the offended“party was to be hitched to the girl of one X and in light of
this expected marriage X and the plaintiff’s father went into a composed understanding by which
it was concurred that each would pay the offended party an entirety of cash. X neglected to do as
such and the offended party sued his agents. Whitman J viewed it as a built up rule that no
outsider to the thought can exploit an agreement, albeit made for his advantage. Consequently, in
spite of the fact that the sole protest of the agreement was to secure an advantage to the offended
party, he was not permitted to sue as the agreement was made with his dad and”not with him.

This rule was further affirmed in the case of Dunlop Pneumatic Tyre Co. Ltd. V
Selfridge& Co. Ltd.15by the House of Lords in the following words:

“In the law of England certain standards are key. One is that exclusive a man who is a
gathering to an agreement can sue on it. Our law remains unaware of a

14
(1861) 1 B.&S. 393.
15
(1915) A.C. 847, at 853, per Lord Haldane.

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 Jusquaesitumtertioarising by method for contract. Such a privilege might be upheld by
wayof contract. Such a privilege might be authorized by method for property, as, under a
trust, however can't be given on an outsider to an agreement as a privilege to uphold the
agreement in personam.”

For this situation Plaintiffs (Dunlop and Co.) sold certain products to Dew and Co. also, secured
an understanding from them not to offer the products beneath the rundown cost and that on the
off chance that they sold the merchandise to another broker they would acquire from him a
comparative undertaking to keep up the value list. Dew and Co. sold the engine to the
respondents (Selfridge and Co.) and guaranteed that they will pay to them the aggregate of £25
for each tire sold beneath the rundown cost. The Plaintiffs sued the respondents for rupture of
agreement for offering beneath the rundown cost and not paying the cash. The House of Lords
held that Dunlop and Co. couldn't bring an activity against Selfridge and Co. since there was no
agreement between the two gatherings. It was additionally watched regardless of the possibility
that it is taken that Dew and Co. were going about as specialists for Dunlop and Co., the last still
can't keep up an activity as there was no thought between Dunlop Co., and Selfridge and Co.,
since the entire of the buy was paid b Selfridge and Co. to Dew and Co.16

Indian Law

The administer of Privity of Contract is pertinent in India as it is material in England. Despite the
fact that under the Indian Contract Act, 1872 the meaning of thought is more extensive than the
English law, yet the custom-based law standard of Privity of agreement is for the most part
material in India, with the impact that lone a gathering to the agreement is qualified for authorize
the same.17

In the case of Jamna Das v Ram Avtar18here A acquired Rs.80,000 by executing a home loan of
her zamindari for B. therefore she sold the property to C for Rs.84,000 and permitted C, the

16
https://www.scribd.com/doc/47730256/Consideration-in-the-Indian-Contract-Act-1872
17
Narayani Devi v. Tagore Commercial Corporation Ltd., A.I.R. 1973 Cal. 401 at 405.
18
(1911) 30 I.A. 7.

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buyer, to hold Rs.80,000 of the cost keeping in mind the end goal to reclaim the home loan on
the off chance that he thought fit. B sued C for the recuperation of the home loan cash, however
couldn't succeed in light of the fact that he was not a gathering to the understanding amongst A
and B.

There are also certain exceptions to this rule of a stranger to contract cannot sue which are
stated on the below:

Trust of Contractual rights or beneficiary under a contract

One of the exceptions of the doctrine of Privity of contract was recognized by Lord Haldane in
Dunlop Pneumatic Tyre Co. v. Selfridge & Co.,19itself. While it is specified that lone a
gathering to an agreement can sue on it, no such right is given on the outsider, it was additionally
expressed that "such a privilege might be presented by method for property, as, under a trust."20
For instance, in an agreement amongst A and B, valuable ideal in regard of some property might be made for C. In
such a case C can uphold his claim on the premise of the privilege presented upon him relying on the specific case
there is a commitment in the way of trust for the outsider, C, emerging out of an agreement will rely on upon the
21
actualities of the case. The Indian Law also recognizes this exception in the case of Khwaja
Muhammad Khan v. Husaini Begum,22there was an agreement between the father of the kid
and a young lady that if the young lady (offended party for this situation) wedded a specific kid,
the kid's dad (here the respondent for this situation) would pay certain individual remittance
known as Kharchi-i-pandan (bettle-box costs) or stick cash to the offended party. It was
additionally specified that a specific property had been put aside by the respondent and this
recompense would be paid out of the salary of the property. The offended party wedded the child
however litigant neglected to pay the recompense paid to him. In an activity by the offended
party to claim this remittance, the respondent fought that his agreement to pay the stipend had
been made just with the plaintiff‟s father and not with the offended party; she being an outsider
to the agreement can't sue. Be that as it may, it was held that since, the premise of the plaintiff‟s
19
(1915) A.C. 847.
20
(1915) A.C. 847, at 853.
21
Malda v. Raj Bahadur, A.I.R. 1937 Cal. 625, at 630.
22
(1910) 37 IA 152: 12 Bom LR 638.

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case being a particular charge on relentless property to support her, she was qualified for case the
same as a recipient, and accordingly, the Common Law govern was not relevant to the actualities
and conditions of the present case.23 It was observed that:
“Here the assention executed by the respondent particularly charges relentless property
for the stipend which he ties himself to pay to the offended party. She is the main
individual valuably entitled under it … in spite of the fact that (she is) not a gathering to
the record, she is plainly qualified for continue in value to authorize her claim.”

In the case of Narayani Devi v. Tagore Commercial Corporation Ltd.24A held different shares
of estimation of Rs. 81,000. It was concurred that A would pitch his common to B and
consequently B will pay A Rs.1,000/month and after his demise Rs.500/month to his A‟s
dowager amid her life. C stood a surety for B. a few installments were made by C to An and after
his demise to A‟s dowager. From that point the installments were halted. A‟s dowager brought
activity against B and C to recoup the sum. One of the litigants argued that the offended party
was not a gathering to the agreement and it was gone into by his better half and the respondents,
she was not lawfully qualified for sue in regard of this understanding being an outsider to the
agreement. The Calcutta High Court dismisses this and held that from the certainties and
conditions of the case the commitment the commitment in the way of trust was supportive of the
offended party, and value was made to support her and she was qualified for it regardless of the
possibility that she was not the gathering to the agreement. An announcement was passed to
support her for the back payments of the sum due.

Conduct, Acknowledgment, or Admission

Some of the time there might be no Privity of Contract between the two gatherings, however in
the event that one of them by his direct, affirmation, or confirmation perceives the privilege of
the other to sue him, he might be at risk on the premise of the law of estoppel.

23
Rasheed, 'Lawful Earning (‫( ')ک س بح الل‬Slideshare.net, 2017) <https://www.slideshare.net/zaheerrasheed/lawful-
earning-28928661> accessed 5 April 2017.
24
A.I.R. 1973 Cal. 401.

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In the case Narayani Devi v Tagore Commercial Corporation Ltd.25discussed before had no
agreement between the offended party and the litigants however the respondents in their
agreement had consented to pay some cash to them even after her husband‟s demise. Here the
question to sue the respondents emerged. After the passing of the spouse same installments were
gotten. Aside from this the respondents had likewise called the offended party to control a few
archives in a similar regard perceiving her rights. It was, in this way, held the had made Privity
with the offended party by their direct and by affirmation and confirmation of her rights
subsequently the offended party was qualified for the activity despite the fact that at the season
of the agreement there was no Privity.

Provision for marriage expenses or maintenance under family

agreement

Where, under a family agreement, the contract is proposed to secure an advantage to an outsider,
he may sue in his own great recipient.26 In the case of SundaraAiyangarv.Lakshmiammal27,
under a family agreement, the male individuals from the family made aprovision for the costs of
her marriage to be contributed by the respondents, i.e., her dad and siblings. She brought an
action to enforce the agreement between the defendants. It was held that despite the fact that the
offended party was not a gathering to the agreement, yet the agreement constituted a
circumstance like trust to support her and in this way, she was qualified for the sum.

25
Ibid.
26
Mst. Dan Kuer v Sarla Devi, A.I.R. 1947 P.C. 8: I.L.R. (1946) All.756: (1947) 49 Bom. L.R 123.
27
A.I.R. 1957 A.P. 965.

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 CHAPTER : 3 - CONSIDERATION MAY BE PAST,
PRESENT OR FUTURE (EXECUTORY)

Section 2(d) of the Indian Contract Act, 1872, recognizes three types of consideration, namely,
Past, Executed and Executory. It says that when at the desire of the promisor, the promisee or
any other person:

1. Has done or abstained from doing, (the consideration is Past.)

2. Does or abstains from doing, (the consideration is Executed or present.)
3. Promises to do or abstain from doing, (the consideration is Executory or future.)

These have been discussed in detail as under:

Past Consideration

Past thought implies that the consideration for the promise had been given before and the
guarantee has been made thereafter. It is, obviously, essential that at the time the demonstration
constituting consideration was done, more likely than not been done at the craving of the
promisor.28For instance in lost or discovered cases if A looses his watch and puts out a notice
that whoever discovers it will get Rs.1,000 as reward. The individual who discovers it has
effectively done the thought. This adds up to substantial (past) thought under Section 2(d), and
the guarantee is enforceable. The words "has done and kept away from doing, in

Section 2(d) of the Indian Contract Act, 1872, as per Pollock and Mulla 29 "announce the law to
be that a demonstration done by A at B‟s ask for, with no contemporaneous guarantee from B,
might be thought for a resulting guarantee from B to A."

Past services voluntarily rendered [Section 25(2)]

28
See Section 2(d).
29
Indian Contract and Specific Relief Acts, 9th Ed. (1972) p.41.

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An intentional administration implies an administration rendered with no demand and there is no
ensuing guarantee for the same. For instance if a man A has lost his watch and someone else B
discovers it and returns it to An and now requests that A give him a reward for the same, An is
not at risk for the same as A has not made any earlier guarantee for the reward and this is not an
agreement. The accompanying representations additionally demonstrate the distinction:

1. A finds B‟s purse and gives it to him. B promises to give A Rs.50. This is a
contract.30
2. A supports B‟s infant son. B promises to pay A‟s expenses in so doing. This is a
contract.31

English Law Regarding to Past Consideration

As per English“law if the demonstration has been done before any guarantee is made, it is called
past consideration and a past consideration is no consideration.32 The past act may clarify why
the guarantee was given and may, in this way, be a thought process in the guarantee, yet it outfits
no legitimate”consideration.33 “The consideration and the promise ought to go together.”34 An
example is McArdle, In re35

An impact certain upgrades to certain property. A definitive recipients of the property

marked a report proclaiming that: with regards to your completing certain adjustments
and changes, we the recipients might reimburse to you the entirety of £244 in settlement

30
Illustration (c) to Section 25.
31
Illustration (d) to Section 25.
32
See Anson, Principles of the English Law of Contract, 23 rd Ed., (1972), p. 85.
33
See Roscoral v. Thomas, (1842) 3 QB 234: 11 LJ QB 214: 114 ER 496.
34
Street Foundations of Legal Liability, 281.
35
(1591) 1 Ch 669: (1951) 1 All ER 905.

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 of the sum spent on such upgrades. An activity to implement this guarantee was
rejected.36
Past consideration at the Promisor’s Request

Past“consideration in lieu of an earlier demand by the promisor is regarded to be a decent

thought. It was set up as ahead of schedule as 1616 as on account of Lampleigh v
Barthwait.37That a past act done at request will be good consideration for a subsequent promise.
The facts were as given on the next”page:

The“litigant, having conferred a murder, asked for the offended party to work
and to do get exculpate from the King. The offended party did his best to acquire
the King’s exonerate, riding and venturing at his own particular cost. A while
later the litigant guaranteed the offended party to give him £200 and afterward
declined to pay. He was, in any case, held subject.

On this setting there is very little contrast between the Indian and English laws.
Indian law perceives past thought, when the same is given at the longing of the
promisor. Past act done deliberately is no thought either in India or England. In
India, be that as it may, a willfully done thought can render an assention
substantial on the off chance that it is announced legitimate under exemption
said in Section 25(2). There is no such arrangement under English”law.

Executed or Present Consideration

When one of the gatherings to the contract plays out his piece of the guarantee which constitutes
the thought for the guarantee by the opposite side is called executed thought and the execution of
the guarantee by the opposite side is the main thing now to be finished. For instance, A makes an

36
1999gaurav, 'Survival Skills' (De.slideshare.net, 2017) <https://de.slideshare.net/1999gaurav/survival-skills-
36657968> accessed 7 April 2017.
37
(1616) Hob 105: 80ER 255.

Page 17 of 27
offer to reward Rs. 200 to any individual who his lost telephone and takes the same back to him.
B finds the lost thing and conveys it to A. At the point when B does as such it adds up to
acknowledgment of the offer which comes about into a coupling contract under which A should
pay Rs.200 to B, and furthermore all the while giving thought for the agreement (i.e. the lost
question).38 The consideration for this situation is executed.

Executed consideration is not the same as past consideration as executed consideration is

outfitted at the same time close by the making of the contract while past consideration is given
before the making of the contract.

Executory or Future Consideration

Right when a man makes a guarantee consequently of the promise created utilizing the inverse
side, the execution of this certification is to be done resulting to making the contract. This is
called Executory consideration. For example, A agrees to sell and B to buy a measure of stock at
a communicated cost. Toward the day's end, A has promised to offer and B has guaranteed to
buy.39

Some Act, Abstinence or Promise by the Promisee Constitutes Consideration

As showed by Section 2(d), when at the longing of the promisor, the promisee or some other
individual has done or swore off doing, or does or avoids doing, or ensures not to do or swear off
finishing something, such

"act or abstinence or guarantee" is called thought for guarantee. It infers that if nothing is done in
kind for the assurance, i.e., where there is no show, self control or guarantee, there is no
consideration.

38
See Carlill v Carbolic Smoke Ball Co., (1893) 1 Q.B. 256.
39
Advertising 1st..., 'Essay On Advertising Project Bba 1St Year - 2424 Words' (StudyMode, 2017)
<http://www.studymode.com/essays/Advertising-Project-Bba-1St-Year-1549159.html> accessed 19 April 2017.

Page 18 of 27
 Consideration Received by one of the Joint Promisors

On the off chance that there are joint promisors yet consideration has been recieved by any of
them, then it is held that the consideration is adequate and official on others moreover. In Andhra
Bank v Anantnath Goel.40 The father got a credit from the bank by the store of title-deeds of his
resolute property, yet the promissory note, to reimburse the advance with premium, was marked
by the father and his child together, for the bank. It was held that the child was similarly at risk
with his dad on the said promissory note, despite the fact that he himself had gotten no
immediate consideration.41

40
A.I.R. 1991 A.P. 245 (D.B.).
41
Natural Mosquito, 'Natural Way To Kill Mosquito Research Paper - 320 Words' (StudyMode, 2017)
<http://www.studymode.com/essays/Natural-Way-To-Kill-Mosquito-1863721.html> accessed 19 April 2017.

Page 19 of 27
CHAPTER : 4 - EXCEPTIONS WHEN THE AGREEMENT IS
VALID WITHOUT CONSIDERATION

English Law

In the English law a contact under seal is enforceable without consideration while the straight
forward contracts require the nearness of consideration. In the expressions of Anson: English law
perceives just two sorts of contract, the contract made by deed that is under seal, which is called
deed or strength, and the straightforward contract.42 An contract under seal implies which is in
composing and which id marked, fixed and conveyed. The English law says that there is no
obligation upon an contract, unless the contract satisfies on of the two conditions, to be specific,
either that it ought to be without "consideration‟ or that it is a deed under seal.43

Indian Law

Area 25 of the Indian Contract Act, 1872, for“the most part that an agreement without
consideration is void. The Section, in any case, gives special cases to the manage expressed
as”under:
“Section 25 - An agreement made without consideration is void unless –

1. It is communicated in composing and enrolled under the law for the present in drive for
the enlistment of archives and is made because of normal love and fondness between
gatherings remaining close connection to each other, or unless

2. It is guarantee to adjust, completely or to a limited extent, a man who has as of now

willfully supported the promisor, or something which the promisor who lawfully
compellable to do; or unless

42
A.G. Guest, Principles of the Law of Contract, 22 nd Ed. (1964), p. 65.
43
Markby’s Elements of Law, 5th Ed., 1896, p. 311.

Page 20 of 27
3. It is a guarantee, made in writing and signed by the individual to be charged therewith, or by
his operator for the most part or extraordinarily approved for that sake, to pay entirely or to some
extent an obligation of which the loan boss may have authorized however for the law for the
restriction of suits.

Regardless of these cases, such an understanding is an contract."

Promise due to natural love and affection [Section 25(1)]

In the event that a promise is made for a man of a close connection because of closeness, love or
fondness, the same is legitimate despite the fact that there is no consideration. The accompanying
conditions should be fulfilled so as to cover this special case:

1. The parties to the agreement must remain in a close relationship to each other.
2. The promise ought to be made to one gathering out of normal love and love for the other.
3. The promises ought to be in composing and enrolled.

The close relationship has not been characterized by act or any legal proclamation. Be that as it
may, from the different choices we can see that it covers blood relations.44 And relations made
through matrimony.45But would not include such relations which are not near, but remotely
entitled to inherit.46 But in a relation where there is no love and affection the exception does not
apply. Like in RajluckyDabee v BoothnathMookerjee.47 After a considerable measure of fights
and differences between the parties who were Hindu a couple chose to live separated. Later the
spouse executed a report giving the wife isolate habitation and support. The agreement
additionally included specify of the squabbles and contradictions between the two. It was held
that the report was not executed as a result of adoration and friendship but rather the
nonappearance of the same, subsequently, the spouse couldn't recuperate the entireties said in the

44
Bhiva v Shivram, (1899) 1 Bom.L.R. 495.
45
Gopal Saran v Sita Devi, (1932) 36 C.W.N. 392.
46
Jafar Ali v Amhad Ali, (1868) 5 B.H.C. 37.
47
(1900) 4 C.W.N. 488.

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record. It is additionally fundamental for the archive to be in composing and the composition be
enrolled under the law identifying with enlistment of records.48

Consideration for Past Voluntary Services [Section25 (2)]

At the point when something‟s done at the craving of the promisor it constitutes a substantial
thought in a similar regard a resulting guarantee to adjust for whatever has as of now been done
is likewise great. As such guarantee to pay for a past willful administration is official. In Sindha
v Abraham.49 The Bombay High Court said that administrations rendered at the craving of the
minor communicated amid majority and proceeded at a similar demand after his majority frame a
decent thought for a consequent express guarantee by him for the individual who rendered the
administrations.

Promise to Pay Time Barred Debt

In another condition if a gathering consents to pay a period banished obligation it is considered

to be legitimate contract. Segment 25(3) required the accompanying basics to be fulfilled in such
a case:

1. The promise must be to pay completely or to some extent a period banned obligation, i.e.,
an obligation which the bank may have authorized installment yet for the law the constraint of
suits.

2. The promise must be in composing and marked by the individual to be charged therewith,
or his appropriately approved operator.

48
'Abstract Of All Natural Insect Repellant Free Essays' (Studymode.com, 2017)
<http://www.studymode.com/subjects/abstract-of-all-natural-insect-repellant-page1.html> accessed 19 April 2017.
49
(1895) 20 Bom. 755.

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The English Law on the fact is likewise same. It was built up in England as path back as 1601
that a point of reference obligation is great thought for an ensuing guarantee. This additionally
incorporates time banned obligations.50

Wholly or in Part

Section 25(3) grants a promisee to pay the time banished obligation entirely or to a limited
extent. On the off chance that the individual guarantees to pay just a piece of the time banned
obligation then he cone just be made at risk for the part promised and not the entire sum.51

There should be Express Promise

The promise to pay a time barred debt must be an express one52 and cannot be held sufficient if
the intention has to be gathered from large number of circumstances. 53 In Tulsi Ram v Same
Singh54 after three years of expiry time of a promissory note the respondent put forth the
expression I acknowledge this pronote and it is legitimate for the following three years (meant
English). Here the Delhi High Court held that the simple affirmation of nearness of obligation
did not give the guarantee of installment and the litigant couldn't be made subject.

Admission to Pay in Court Proceedings

In State Bank of India v Dilip Chandra Singh Deo55 It has been held that if the lawful
beneficiary of perished makes a confirmation in court prosecuting his readiness to pay the
aggregate obtained by the expired, he can be held at risk on the premise of his affirmation,
despite the fact that the recuperation for the same is banned by impediment.

50
Hyelling v Hastings, (1699) 1 Ld. Ray.389, Also see Section 23(4) (English) Limitation Act, 1939.
51
GovindaNiar v AchutanNiar, A.I.R. 1940 Mad. 678 at p. 679.
52
BachuKamalamma v Srinivasa Oil Mill, A.I.R. 1980 N.O.C. 41 (A.P.).
53
GovindaNiar v AchutanNiar, A.I.R. 1940 Mad. 678 at p. 679.
54
A.I.R. 1981 Delhi 165.
55
A.I.R. 1998 Orissa 129.

Page 23 of 27
 Promise to Pay must be Unconditional

Promise to pay time barred debt within the meaning of clause (3) of Section 25must be expressed
and unconditional. In K. Jeyaraman v M/s Sundaram Industries Ltd.56 The appealing party
made a formal acknowledgment of the way that in a report he had agreed to pay the sum simply
in the wake of getting the sum from the State Electricity Board. It was held by the Madras High
Court that the record passed on a restrictive guarantee and was not secured by Section 23(3) as
the reason for activity of documenting suit would just emerge after sum was gotten from the
State Electricity Board.

56
A.I.R. 2008 (NOC) 2532 (Mad.).

Page 24 of 27
 CONCLUSION

Endeavors have been made to legitimize the regulation of consideration on the ground that it is
fundamental both to the shape and the substance of an understanding. Consideration, it has been
fought, is a formal need which serves to perceive those certifications by which the promisor
arrangements to be really bound from those which are not truly inferred: purchasers mean
business where contributors may not. Regardless, English law starting at now requires an intend
to affect legitimate relations as an unmistakable segment of an agreement.57 Consideration is
well-suited affirmation of the nearness of such a point, in any case it is by no means, persuading
proof that it is accessible. The revocation of the tradition would along these lines simply suggest
that the trial of definitive objective would acknowledge a more critical significance in the law of
agreement. Couple of individuals would battle that this constituent and insuperable challenge to a
conformity in the law, for custom-based law system seem to exist happily without the
prerequisite for thought.

While molding an understanding, consideration is required in order to make the agreement a

formal, legitimate contract. This is one of the three central necessities other than shared consent
and a true blue offer and affirmation. Consideration, basically implies the exchanging of things
or organizations of critical worth. For instance, apples, the social event tolerating the apples
needs to exchange something of huge worth for the apples.58 This as a rule comes as financial
portion. The consideration can in like manner be diverse things or even organizations. The truth
is that the social affairs must exchange something of huge worth. Many contracts give an
introduction (a declaration toward the begin of the agreement) that the agreement is being gone
into for good and critical consideration, the ampleness of which is perceived, or something to
that effect. The researchers of these agreement mistakenly assume that essentially
communicating that consideration exists truly fulfills the need of legitimately restricting
consideration. In a lion's share of states, in any case, this is not the circumstance; such

57
'Acknowledgement Sample For School Project' (Acknowledgment sample, 2017)
<http://acknowledgementsample.com/acknowledgement-sample-for-school-project/> accessed 19 April 2017.
58
'CAFE VILLA' (prezi.com, 2017) <https://prezi.com/9tz8c6cgoi2a/cafe-villa/> accessed 19 April 2017.

Page 25 of 27
introductions don't exhibit anything. So to speak, expressing there is consideration doesn't
generally mean there is consideration.

Legitimate scientists agree that generally, an agreement doesn't need to join something other than
a declaration that the social occasions agree. The extraordinary case is for contracts that only a
solitary get-together signs, for instance, assignments, decision agreement, or promissory notes. In
these understandings, an introduction that the consideration is satisfactory should be
consolidated, in light of the way that it's not evidently clear that a normal exchange has
happened.

All together for any agree to be respected lawfully official, it must join consideration regarding
every individual or association that enters the agreement. This article covers the stray pieces of
the idea need, including honest to goodness instances of thought.

Believed is required so that both sides achieve some sort of weight or responsibility in the
understanding. Without consideration, the trade would likely be appointed as gift. Blessings are
managed interestingly as opposed to contract agreement.

Consequently, by the assistance of this venture we inferred that consideration is a substance to

the contract. Be that as it may, it additionally contains a few special cases which are examined
above in the venture.

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 BIBLIOGRAPHY

BOOKS:
Singh, Avtar
th
Contract & Specific Relief, 10 Ed.
Eastern Book Company (Lucknow), 2008

Bangia, R.K.,
th
Law of Contract Part I, 6 Ed.
Allahabad Law Agency (Faridabad), 2009

Furmston, Michael
th
Cheshire, Fifoot&Furmston‟s Law of Contract, 14 Ed.
Lexis NexisButterwoths, 2006

Kumar, P.N.
th
SanjivaRow‟s Commentary on The Indian Contract Act, 1872 and Tenders, 10 Ed.
Delhi Law House, 2007

WEBSITES REFERRED
www.Indiankanoon.org
www.sci.nic.in
www.lawsenate.com
www.slideshare.net
www.keralawyer.com
www.legalserviceindia.com
www.webmani.ac.in
www.orissahighcourt.nic.in
www.kennedys-law.com
www.slideshare.net
www.scribd.com

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