Consideration (quid pro quo):
A) Definition – 2(d)
‘When at the desire of the promisor, the promisee or any other person had done or
abstained from doing, or does or abstains from doing, or promises to do or to abstain
from doing,
something, such act or abstinence or promise is called a consideration for the
promise.’
B) Meaning –
a) Consideration means something in return
b) It may be an act or abstinence or promise
Note –
As per Section 25 of the Indian Contract Act, 1872 “An agreement made without
consideration is void”
C) Types of consideration –
Past Consideration – Present consideration Future Consideration
(Executed consideration) – (Executory
In case of past
Present consideration is consideration)–
consideration, the promisor
one in which one of the
had received the when consideration is
parties to the contract has
consideration before the to move at a future
performed his part of the
date of promise date then it is called
promise, which Constitutes
the consideration for the as future
promise by the other side
it is known as present
consideration.
D) Essentials of valid consideration –
1) Consideration must move at the desire of the promisor –
a) Consideration must move at the desire of the promisor.
b) whatever is done must have been done at the desire of the promisor and not
voluntarily or not at the desire of a third party
Example:
•If Munna rushes to Circuit’s help whose house is on fire, there is no consideration but a
voluntary act. But if Munna goes to Circuit’s help at Circuit’s request, there is good
consideration as Circuit’s did not wish to do the act gratuitously (without consideration)
•Uday Bhai agrees to sell his horse to Majnu Bhai for ` 50,000. Here consideration for Uday
Bhai for selling horse to Majnu Bhai is consideration of ` 50,000 from Majnu Bhai and
consideration for Majnu Bhai paying ` 50,000 to Uday Bhai, is Uday Bhai selling his horse.
Here considerations had come at the desire of Promisor. Uday Bhai is a promisor for Majnu
Bhai and similarly Majnu Bhai is a promisor for Uday Bhai.
2) Consideration may move from the promisee or any other person:
a) Consideration may be furnished even by a stranger under Indian Law.
b) Consideration can be from any direction, even a stranger to contract can offer
consideration. Case law: Chinnayya v/s Ramayya
3) Consideration must be something of value –
Consideration must have some value in the eyes of law, and it should be real.
4) It may be an act, abstinence or a return promise –
a) Promise to not to smoke is a negative act (abstinence),
b) Promise to not to refer the matter to court (abstinence).
c) Promise to perform at the wedding anniversary or birthday party (promise to do).
5) It may be past, present or future which the promisor is already not bound to do –
a) According to Indian Law Consideration may be past, present or future.
b) But under English Law Consideration may be present or future. Past consideration is
no consideration according to English Law
6) It must not be unlawful –
The consideration or object of an agreement is lawful, unless —
• It is forbidden (prohibited) by law;
• or is of such a nature that, if permitted, it would defeat the provisions of any law;
• or is fraudulent;
• or involves or implies injury to the person or property of another;
• or the Court regards it as immoral, or opposed to public policy
