This document defines consideration and provides examples of what constitutes consideration in a valid contract under Indian law. It states that consideration is something of value that is exchanged between parties to a contract, such as a promise to pay money in exchange for goods. The document outlines the legal rules regarding consideration, including that it must be real, not illusory, and cannot be past performance of an existing duty. Exceptions where a contract may be valid without consideration include promises made out of natural love and affection or to pay a time-barred debt.

1. CONSIDERATION

2. NEWS
• As per your choice

3. LEARNING OUTCOME
• Apprehend the essentials for a valid
contract
• Comprehend the exceptions of contract
without consideration

4. Consideration is defined as price of promise
OR
Quid pro quo – something in return
This means that when a party to an agreement
promises to do something, he must get
something in return.

5. DEFINITION
Section 2 (d) Indian Contract Act,
“ When at
the desire of the promisor, the promisee or any
other person has done or abstain from
doing, or does or abstain from doing, or
promises to do or abstain from doing
something, such act or abstinence or promise is
called consideration.”

6. “Consideration is a price for which the
promise of the other is bought, and the
promise thus given for value is enforceable”

7. Example
A agrees to sell his house to B for Rs.10000.
Here B’s promise to pay Rs.10000 is the
consideration for A’s promise to sell the
house, and A’s promise to sell the house is a
consideration for B’s promise to pay
Rs.10000.

8. Consideration May be :
• An act - means doing of something.
e.g. Guarantee by A
• An abstinence – promising not to do
something .
e.g. tenant promise not to file a case
• A return promise – the promise of each party
is the consideration for each other
e.g. promise to sell the house

9. Legal Rules : Consideration
1. It must move at the desire of the promisor
(Case : Durga Parsad v. Baldeo – market
improvement )
2. It may move from promisee or any other
person on his behalf(immaterial who
furnishes it)
Case : Chinnaya v. Ramayya

10. 3. It need not be adequate
4. Consideration must be real and not
illusory:
- physical impossibility
- legal impossibility
- uncertain consideration
- illusory consideration

11. 5. It may be past, present or future
- past (when consideration for present
promise has been given in past)
- present/executed (when consideration
given simultaneously )
- future/ executory (when consideration is to
pass subsequently to the contract)

12. 6. It must not be performance of existing
duties
7. It must not be illegal, immoral or opposed
to public policy
8. It must be ‘something of value’

13. A Contract without consideration is void
– Exceptions
OR
“No Consideration, No Contract” -
Exceptions

14. “An agreement made without
consideration is void........”
But following are the certain exceptions to
this general rule where the agreement is
valid and enforceable even if it is without
consideration:

15. 1. Natural love and affection:
[Case: Venkatswamy v. Rangaswamy ]
• An elder brother, on account of natural love
and affection, promised to pay the debts of his
younger brother.
• The agreement was put to writing and was
registered.
Held : The agreement was valid

16. Continued…
Case: Raihikhy Dohee v. Bhootnath
• A Hindu husband by a registered document,
after referring to quarrels and disagreements
between himself and his wife, promised to pay
his wife a sum of money for her maintenance
and separate residence.
• it was held that the promise was
unenforceable

17. Continued…
2. Compensation for voluntary services:
Example: A finds B’s purse and gives it to him. B
promises to give A Rs. 50. This is a contract.

18. 3. Promise to pay a time bared debt
Example:
A owes B Rs.10000, but the debt is barred by the
Limitation act. A signs a written promise to pay
B sum of Rs.10000. this is a valid contract
4. Completed gift

19. 5. Contract of agency
6. Charitable subscription (Kedar nath Vs. Gauri
Mohamed)
7. Remission by the promisee, of performance
of the promise

20. MCQ
• As per your preference

21. Thank You