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Consideration |
b. Consideration
The concept of consideration has been derived from the Latin phrase "quid pro quo" which means "something for something". It is a well settled principle that "where there is no consideration there is no contract" The consideration given must be of some value, but it need not be adequate.
Sir Frederick Pollock has defined consideration as "the price for which the promise of the other is bought, and the promise thus given for value is enforceable."
In the words of Justice Lush "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, detriment, loss, or responsibility given, suffered or undertaken by the other."
According to Blackstone "Consideration is the recompense given by the party contracting to the other."
Section 2(d) of the Indian Contract Act, 1872 defines consideration which is 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 promises to do or to abstain fro doing, something, such act or abstinence or promise is called a consideration for the promise."
Thus the ingredients of a valid consideration are:
- It has to be given at the desire of the promisor
- It has to be given by the promisee or any other person
- A consideration may be past, present or future
The consideration is said to be past when the promisee or any other person has done or abstained from doing any act.
It is deemed to be present (or executed) when the promisee actually does or abstains from doing such act and when there is a promise to do or abstain, the consideration is known as future (or executory).
Exceptions to Consideration
Section 25 of the Indian Contract Act has laid down certain exceptions when consideration is not needed. The section states "An agreement made without consideration is void, unless-
- Agreement without consideration void, unless it is in writing and registered-it is expressed in writing and registered under the law for the time being in force for registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless
2)
- or is a promise to compensate for something done-it is promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; unless.
3)
- or is a promise to pay a debt barred by limitation law-it is a promise, made in writing and signed by the person to charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitations of suits.
In any of these cases, such an agreement is a contract.
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