1. Consideration
 Importance of consideration:
 A promise without C is purely gratuitous and, however sacred and
binding in honor it may be, cannot create a legal obligation.
 Contract = promise + the C for the promise
 Thus generally, a contract can not be thought of without
consideration. “No consideration, no contract” is the rule of law.
 Since agreement Sec 2(e), is a promise in exchange for a
promise, each promise forming consideration for other. It will
therefore be an inconsistency to think of an agreement and
consequently contract without C.
 Thus, we can say:
 Except in certain cases, a contract without C cannot be thought of
and if made, it is devoid of any legal obligation.

2. Rules as to consideration
 C must move at the desire of the promisor.
 C may move from the promisee or any other person.
 Stranger to contract V. stranger to C
 A stranger to consideration can sue but a stranger to a
contract can not. Exceptions:
 Beneficiary in a trust
 Provision of marriage expenses of female in joint hindu family
 Family members who were not part in a family settlement
 Assignment to a contract
 An acknowledgement of a liability
 C need not be adequate.
 C must be real and valuable.
 C must be legal.
 C may be present (executed), future (executory) or past.

3. “No Consideration no contract
”
 An agreement without C is valid if:
 It is expressed in writing and
 It is registered (under the law of R), and
 It is made on account of natural love and affection, and
 Made between parties standing in a near relation to each other. [Section
25(1)]
 A promise without C is valid if, “it is a 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”. [Section 25(2)]
 A promise to pay, wholly or in part a debt which is barred by the law of
limitation can be enforced if (a) it is in writing, and (b) is signed by the
debtor or his authorised agent. [Section 25(3)]