INDIAN CONTRACT ACT 1872 CHAPTER -1 - CONSIDERATION Consideration is the price for the promise of the other party and it may either be in the form of benefit or some detriment to the parties Consideration = Promise / Performance that parties exchange with each other CONSIDERATION - "QUID PRO QUO" - Something In return RULES OF A VALID CONTRACT 1.Consideration must move at the desire of the promisor Consideration can be offered by the promise or a third-party only at the request or desire of the promisor. If an action is initiated at the desire of the third-party, it is not a consideration 2.1t may move from promisee to any other person consideration may move from the promise to any other person. However, it is important to note that there can be a stranger to consideration but not a stranger to the contract 3.Executed and executory consideration Consideration in performance - executed Consideration in promise - executory 4.1t may be past present or future 5.It need not be adequate Something received in return need not be equal to something given 6.Performance of what one is bound to legally perform The performance of a person who is legally bound to do an act cannot be a consideration for a contract 7.It must be real and not illusory Consideration must be something to which law attaches some value. It must be legal and physically possible 8.1t must not be unlawful,immoral or opposed to public policy SUIT BY A THIRD PARTY TO A CONTRACT DOCTRINE OF PRIVITY OF CONTRACT -It states that a stranger to a contract cannot sueEXCEPTIONS TO DOCTRINE OF PRIVITY OF CONTRACT 1.Trust If a contract is made between the trustee of a trust and another party, then the beneficiary of the trust can sue by enforcing his right under the trust, even if he is a stranger to the contract. 2.Family Settlement If a contract is made under a family arrangement to benefit a stranger (person not a party to the contract), then the stranger can sue in his own right as a beneficiary of the contract. 3.In case of certain marriage contracts/arrangements 4.Assignment of a contract Assignment-transfer of benefits If a contract is made for the benefit of a person, then he can sue upon the contract even though he is not a party to the agreement. 5.Acknowledgment or Estoppel If a contract requires that a party pays a certain amount to a third-party and he/she acknowledges it, then it becomes a binding obligation for the party to pay the third-party. 6.A Covenant Running with the Land When a person purchases a piece of land with the notice that the owner of the land will be bound by all duties and liabilities affecting the land, then he can suc upon a contract between the previous land-owner and a settler even if he was not a party to the contract 7.Contract through an Agent Ifa person enters into a contract through an agent, where the agent a his authority and in the name of the person (principal). s within the scope of