basic concepts of Consideration

1. CONSIDERATION
MICHEAL SOLOMON L

2. CONSIDERATION
According to Sec 25 of the Contract Act, An Agreement
without Consideration is VOID
Consideration is the BACKBONE of all promises.
A Promise without Consideration is called “NUDUM PACTUM”.
(Bare Promise)
Consideration is a technical term used in the sense of Quid Pro
Quo which means “SOMETHING IN RETURN”.
Consideration is the price for which the promise of the other is
bought and promise thus given for value is enforceable.

3. EXAMPLE
 Manu agrees to sell his car to Arjun for RS.2 Lakhs. Car worth RS 2Lakhs is the
consideration for Arjun and RS 2 Lakhs is the consideration for Manu.

4. Consideration may be
An act of doing something
Abstaining from doing something
A return promise

5. Definition
According to Sec (2) of the Indian Contract Act
Consideration is defined as “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 abstain fro doing
something , such act or abstinence or promise is
called a consideration for the promise”

6. Essentials and legal rules for valid consideration
 Consideration must move at the desire of the promisor
 Consideration may be given by the promisee or any other person
 Consideration must be lawful
 Consideration must be real and not illusory
 Consideration must be of some value in the eyes of law
 Consideration must not be the performance of existing duties
 Consideration need not be adequate
 Consideration may be either positive or negative
 consideration may be past, present or future

7. Contract without consideration is void -
Exceptions
Natural love and affection
Compensation of past voluntary services
Promise to pay a time barred debt
Completed gift actually made
Consideration is not required for the
creation of agency

8. Privity of Consideration / Stranger to
Consideration
The term “Privity of Consideration” means
stranger to consideration or consideration
given by any other person other than
promisee.

9. THANK YOU