- Consideration is something of value that is exchanged between parties in a contractual agreement. It can take the form of an act, abstinence from an act, or a promise. For the agreement to be valid, consideration must move from one party to benefit the other. - Examples of consideration include payment of money for goods or services, a promise to refrain from certain acts, or mutual promises such as in an agreement to sell a car. Consideration needs to be real, not impossible to fulfill or uncertain. - For consideration and the object of the agreement to be lawful, it cannot be forbidden by law, defeat legal provisions, involve fraud, injury to people or property, be regarded as immoral, or

1. Consideration and Object

2. Introduction
• The price
• For the promise or
• The something given and
• Obtained is called consideration
• Consideration is something in return.
• Something which is of some value in the
eyes of law. (Valuable Consideration)

3. • Agreement is a mutual Exchange of
Promises.
• One party makes the promise (For Doing
or Not doing any thing)
• Another party also makes similar Promise.

4. • Every Promisor gets something in return
of his promise from another party.
• It may be a Right , interest , profit or
benefit , responsibility.
• Whatever he gets will constitute
consideration for his Promise.

5. Example
• A offers to sell his car to B for 5 Lacs.
• B Accepts the offer.
• There is the mutual Exchange of Promises
(Obligation/Undertaking) between them.

6. • A is a Promisor for “ Handing over
possession and ownership of that car to B.
• A in return of his promise gets right to
recover Rs.5 lacs from B which Constitute
consideration for his Promise. Vice versa

7. It may be as Follows:
• An act
• Abstinence
• Promise
Forms of Consideration

8. ACT: Doing of Something
Example:
• A agrees to constructs B’s House for Rs:
1 Million.
• B’s Promise to Pay Rs: 1 Million is the
consideration
for A’s promise of
Constructing the House. (Act)

9. ABSTINENCE: Refraining from
doing Some Act
• Forbearance to Exercise the legal Right,
e.g.
Example:
• A promise not to sue B if B pays him
Additional Rs. 5,000.
• The Abstinence of A is the Consideration
for B’s Payment.

10. Example
• In return of Rs. 2 Million from a Sports
Goods company a super star of cricket
makes a promise not to use bats other
than manufactured by that company.
• In this case Consideration for the other
companies is in the from of Abstinence.
• A super star has promised to abstain from
using other bats.

11. PROMISE: From Both Sides
• (A Promise by one party against the
promise of other party.
Example:
• A agree to sell his Car to B for Rs. 1
Million.
• B’s Promise to pay Rs. 1 Million is the
Consideration for A’s Promise.
• A’s Promise to sell the Car is the
Consideration for B’s Promise.

12. • Any Act , Abstinences or Promise may
Result in Benefit , right or interest for one
party and/or
• Loss and obligation for another party.

13. Essentials of a Valid Consideration
• It must move at the desire of the Promisor.
• For valid Consideration it must be move
on the desire/ Request of the Promsior.
• Not done voluntarily or without the request
of the promisor.

14. It may be
• Past
• Present
• Future

15. It must be real
• Not valid if
– Physically Impossible
– Legally Impossible
– Uncertain Consideration
– Unreal consideration

16. Exception
• Natural Love and Affection
– In Writing , registered , Relationship , natural
love and affection.
• Voluntary Compensation
– To compensate
• Time Barred Debt
– Not claimed for a period of 3 years from the
date it becomes Due. Limitation Act 1908.

17. • Completed Gift
– Possession is given.
• Contract of Agency
– Without charging any commission.
• Remission by the Promisee
– Less then what is due
– Extended time for performance of a contract

18. UNLAWFUL CONSIDERATION AND
OBJECTS.
• The object means the purpose of the
contract/agreement.
• 1.IF IT IS FORBIDDEN BY THE LAW
Punishable by law
Example: Goods obtained by the theft
Prohibited by law
Example: Sale without license

19. 2.IF IT DEFEATS THE PROVISION
OF LAW.
• Indirectly violate law
• If permitted, it would defeat the
provisions of any law.
Example: A fails to pay his loan to HBFC.
A’s house is sold for Recovery of Debt. A
is prohibited from purchasing his house.

20. 3. IF IT IS FRAUDULENT.

21. 4.IF IT INVLOVES INJURY TO PERSON
OR PROPERTY OF ANOTHER.
• To cause an injury to the person and or
property of another is illegal and also
void.
Example: Put certain property on fire.
To beat a man.

22. 5.IF THE COURT REGARDS IT AS
IMMORAL
• Immoral means acts which are against
the moral values also prohibited by the
law.
Example: Marriage-Divorce.

23. 6.IF THE COURT REGARDS IT AS
OPPOSED TO PUBLIC POLICY.
• Harmful to the society or the state.
Example: Give money to give false
evidence.
Agreement with an alien
enemy.