Rules Regarding Consideration

1. Subject :Mercantile Laws
TOPIC: LEGAL RULES REGARDING CONSIDERATION
GROUP MEMBER
ID NO: 14BCOM08 BAFNA ANKUR
14BCOM29 PATEL MITUL
14BCOM31 PATEL HEMANSHU

2. Legal Rules Regarding Consideration
Consideration must move at the desire of the promissor:
an act forming consideration that must be done at the
desire or request of the promisor. If it is done unless a
person offers to do something how can he be made liable
to pay for that?
Example: A polished B’s car without any request from B. is
B liable? Obviously not, as the polish on B’s car was done
without his request.

3. consideration may move from promisee or any other
person: the consideration may be given by the promisee or
any other person on his behalf.
Example: a father gifted the whole of his property to his
daughter on the condition that she should pay a certain
sum of money annually to her uncle(father’s brother) on
the same day, the daughter entered into an agreement
with her uncle and agreed to pay the annually. Later on,
the daughter refused to pay the amount that the uncle not
received any consideration. The court held that the
consideration was paid by the father on behalf of her
uncle. Therefore, the uncle was entitled to recover the
annuity.

4. Consideration may be forbearance: this means that
the consideration may be a promise not to file a legal suit
against the person.
example: A’s scooter is damaged by B negligently driving
his car. B promises to pay Rs.1000 as repair charges for
the scooter if A does not sue him in a court of law. Here,
A’s forbearance to sue B is a good consideration.

5.  consideration may be past, present or future:
Past consideration: when a consideration by a party for a
present promise was given in the past.
Example: A found B’s purse and gave it to him . B promised to
give A Rs.50 as a reward. Here, for B’s promise, the act of A in
finding B’s purse is the past consideration.
Present consideration: when the promisor receives
consideration simultaneously with the promise, it is present
consideration.
Example: A purchase goods by paying money in cash here,
the consideration is present consideration.

6. Future consideration: when consideration for a promise is
rendered in future it is future consideration
example: A agreed to sell and deliver certain goods to B after
a week at agreed price. B agreed to pay the price after fifteen.
days. Here, as the price and the ownership of goods are to be
Transferred in future. Therefore the consideration in future
For both the parties
 Consideration need not to be adequate: it is not
Necessary that there must be full return for the promise.
Example: A agreed to sell his watch worth Rs.100 only for
Rs.10 .A’s consent to the agreement was given freely .the
Consideration, though inadequate, will not affect the validity
Of the contract.

7. Consideration must be real and not illusory: consideration
must be real, it has some value in the eye of law . it should
not be illusory
Example: A promised to pay Rs.500 to B if he brings a star
from the sky to earth. Here, consideration for A’s promise to
pay Rs. 500 to B is “to bring a star from the sky”. The contract
is void as the consideration is illusory. This promise is also
physically impossible to perform.

8. It must be something which the promisor is not already
bound to do: means preexisting legal and contractual
obligations cannot be regarded as good consideration
Example: A promised to pay Rs. 1000 extra to a lawyer for
winning the suit. A is not bound to pay Rs.1000 even if he
wins the case . payment of one thousand rupees extra in this
case is not a good consideration because the lawyer was
legally bound to do.
Consideration must not be illegal , immoral ,or opposed to
public policy: means the consideration must be lawful
Example: A promised to pay Rs. 500 to B if he beats C. the
agreement is void as the consideration involves an injury to C,
which is unlawful.

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