The word 'consider
' originated from Latin word. Consideration is one among
the most important essential of a valid contract. it's the foundation of every
contract. Verified consideration are often stated as a consideration whose value
is an exchange with the promise.
- A promises B to not file a suit against him if he pays him Rs.500. A's
abstinence is taken into account as the consideration for B's payment.
Definition of consideration
Blackstone defines, "Consideration is that the recompense given by the party
contracting to the other"
Essentials of valid consideration
According to Section 10 of the Contract Act, all agreements are contracts which
are made by the:
- Free Consent Of Parties;
- Competent To Contract;
- For A Lawful Consideration; And
- With A Lawful Object.
Essentials of a legitimate consideration are mentioned below:
Consideration Must Move At The Will Of The Promisor (Promissory
Estoppel)Consideration must are given at the desire of the promisor. the will of the
promisor may be expressed or implied. As per Section 2(d) the act, or abstinence
to try to to or not to do something must be at the desire of the promisor and
not at any other third party.
Durga Prasad v Baldeo ILR (1881) 3 AII 221
In this case court observed that the agreement was void for want of
consideration because the plaintiff had not constructed the market at the desire
of the defendant, but at the will of the collector.
Consideration May Move From The Promisee Or The Other Person"A stranger to consideration don't have the right to sue a contract" according
to English law.
Consideration must tend by the promisee.. But as per Indian Law, consideration
may move from the promisee or the other person. When it involves Indian Law a
stranger to consideration can sue on a contract, provided he's a party to the
contract. this is often also known as "Doctrine of Constructive Consideration".
Consideration Could Also Be Past, Present Or FutureAs per Indian Law, consideration could also be past, present and future. But
under English Law, consideration could also be present or future but not past.
In India, Past consideration may be a good consideration. Consideration are
often either past, present or future in nature.
- Present or executed consideration
When the promise and consideration occur simultaneously it's termed as Present
or Executed Consideration.
- Future or executory consideration
When the promisor has got to receive consideration in future for his promise,
it's termed as Future or Executory Consideration.
- Past consideration
When the promisor had received the consideration before the date of the promise,
the consideration is termed as Past Consideration.
There also are Exceptions to the Rule that Past Consideration is no
- Service must be delivered at the request made by the promisor
- Promise to pay a time-barred debt
- Negotiable Instrument.
Example: A rendered
some services to B within the month of January. In February, B promises to
pay A Rs.300 The consideration of A is past consideration.
So Past consideration is not any consideration at all in English Law. Hence an
agreement supported past consideration is void.
Consideration Needn't Be AdequateConsideration means 'something in return'. Courts stress upon the principle that
"consideration needn't be adequate, but it must be real". consistent with
Explanation 2 to Section 25 of the Contract Act ,1872 is extremely significant.
Thomas v Thomas (1842) 2 QB 851
In this case court held that Consideration must have some value in the eyes of
law and it was further held that motive is not sufficient consideration.
Consideration Must Be Real Not IllusionaryIn simple words, the consideration must have some value . The consideration
shouldn't be impossible, illusory, unsubstantial.
- Unreal considerations
The following are not real considerations:
- Physical Impossibility-If A promises B to run at a speed of 100 miles an
hour if B pays him Rs.1000. A's promise is physically impossible
- Legal Impossibility-When the performance of promise is legally
impossible, consideration isn't real.
- Uncertain consideration-Consideration isn't real and is not enforceable
if it is uncertain.
- Illusory Consideration-An illusory consideration isn't real and is
- Pre-existing legal obligation-When there's a promise to perform a public
duty by a public servant is not a consideration.
- Real or good Considerations
Debi Radha Rani v Ramdas (1935) Mad. 521
In this case D sued her husband for maintenance allowance. She sued after her
husband agreeing to pay the monthly allowance. it had been held that the
forbearance to sue amounted to good consideration for the husband's promise to
- Compromise of a disputed claim-Compromise may be a kind of forbearance.
- Composition with Creditors-A one that is not ready to pay debts fully
may call a meeting of his creditors and request them to accept lesser
amount. If the creditor agrees thereto agreement will bind upon both the
creditor and debtor.
- Consideration must be lawful-It must not be illegal or immoral. If
consideration is against the law the agreement cannot be enforced.
- Promise to perform an already existing contractual duty is not any
consideration-If A is obliged to perform a contractual duty owed to B, B's
promise to pay something additional for the identical promise is no
Contract considered many essential elements and lawful consideration is integral
part or element of a legitimate contract. A contract under seal is enforceable.
No Consideration-No Contract may be a Rule.
- Dr.S.R.Myneni, 21st edition
- Avtar Singh, 12th edition
Written By: Surya. A. Nair