Module 7

Consideration
By
Dr. Alice Mani
Consideration

● Essential Element of a
Valid Contract
● As Per Section 10 of the
Indian Contract Act 1872
Definition

● Section 2 (d) of The Indian

Contract Act 1872, Defines
Consideration as “When at the
Desire of the Promisor,the
Promisee or Any Other Person
Has Done
Continued—
● 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 Valid Consideration

● Eight Points
1.Consideration Must Move at the Desire of
the Promisor

● For Services Rendered

Voluntarily, Consideration is
Not Required
2. Consideration May Move From the
Promisee or Any Other Person

● Even a Stranger to Consideration Can Sue

on a Contract
● This Principle is Known as “ Doctrine of
Constructive Consideration”
● Chinnayya Vs. Ramayya
3. Consideration Must Not be Illusory, But
Should Be Real and Specific

● Physical or Legal
Impossibility of the Thing
Promised Makes it Unreal
Consideration
4. Consideration Need Not be Adequate

● Court Will Not Interfere

on the Inadequacy of
Consideration
5. Consideration Must be Lawful

● As per Section 23 of the Indian Contract

Act 1872
● Consideration is Unlawful, if
● It is Forbidden by Law
● It is of Such Nature, That if Permitted
Would Defeat the Provisions of Any Law
Continued—

● It is Fraudulent
● It Involves or Implies Injury to the
Person or Property of Another
● The Court Regards it as Immoral or
Opposed to Public Policy
6. Consideration May be An Act or
Abstinence or Promise

● Act
● Abstinence
● Promise
8. Consideration May be Past, Present or
Future

● Past Consideration
● Present Consideration, and
● Future Consideration