Professional Documents
Culture Documents
Business Law 1b
Business Law 1b
Consideration
• It is one of the most essential elements of a
contract
• Subject to certain exceptions a contract without
consideration is nudum pactum and void
• It is a technical term used in the sense of quid
pro quo( something in return)
• When a party promises to do something he must
get something in return
• Consideration is the price for which the promise
of the other is bought and the promise thus
given for value is enforceable
Contd.
• A promise made for nothing has no force
in law.
• The breach of a gratuitous promise cannot
be redressed by legal remedies, it is only
when a promise is made in return of
something from the promisee that such
promise can be enforced by law against
the promisor
Definition and components
• Section 2d of the Indian contract Act defines consideration as follows:
When at the desire of the promisor, the promisee or any other person
has done or abstained from doing or does or abstains from doing or
promise to do or to abstain from doing, something, such act or
abstinence or promise is called a consideration for the promise.
Example A out of natural love promises to give B Rs. 1000 and registers it.
Note A husband referring to qualrrels and disagreement agreed to pay his wife
for separate residence and maintenance, the agreement lacked consioderation
as it was not made out of natural love (Rajlakhidevi vs Bhootnath)
Contd.
2. Agreement to compensate for past voluntary service: A promise made without
consideration is also valid, if it is a promise to compensate wholly or in part for
past voluntary service