The document discusses the rule that contracts require consideration to be valid and exceptions to this rule. It defines consideration as something of value exchanged between parties in a contract (quid pro quo). The main points are: 1) Consideration must be real, not illusory, and lawful. It need not be adequate in value. 2) Exceptions where contracts don't require consideration include natural love and affection between close relations, completed gifts, voluntary services, time-barred debts, contracts of agency, and gratuitous bailments. 3) Promises to charities are generally unenforceable due to lack of consideration, as neither party gains or suffers directly from the promise.

1. Section 2(d)
Meaning = Quid Pro Quo “Something in return”
 (Section 25) No ‘Consideration’ = No ‘Contract’.
(An Agreement without Consideration is Void).
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2. Essentials of Consideration
 Consideration need not be adequate
Eg: Raj agrees to sell his Car worth Rs. 5 Lakh for Rs. 1 lakh.
 Consideration must be Real not Illusory
Case: White vs. Bluett (Father & Son – release from the debt on a
condition).
 It must not be Unlawful
Eg: Contract for Kidnapping/Murder
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3. Contract without Consideration is Void (Exceptions)
 Natural Love & Affection – Valid even without consideration provided.
i. Expressed in writing.
ii. Parties must have Close relation
iii. Registered
iv. Voluntary
Case: Rajlukhy vs. Bhootnath (Void even with Consideration) because
love & affection element between two was missing & it was not voluntary.
Eg: Father & Son property (Valid even without Consideration).
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4. Contract without Consideration is Void (Exceptions)
 Completed Gift
Eg: Doner (Offers) Donee (Gift Accepted)
 Voluntary Service
Eg: Find a purse & returns
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5. Contract without Consideration is Void (Exceptions)
 TBD (Time barred Debt).
Eg: In case of Contract, Indian Limitation act {in next 3 Years after COA
(cause of action) arises}.
2000
• Grant
Loan to
Friend (50
Lakh)
2001
• Refused
to Repay
(COA)
2002
• Not filed a
Case
2003
• Not filed a
Case
2004
• Not filed a
Case
2005
• (TBD)
Voluntary
Came to
Repay
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6. Contract without Consideration is Void (Exceptions)
 Promise to Charities – Just promise to contribute to Charity is not
enforceable by law because it is without consideration.
Case: Abdul aziz vs. Nasum ali. (to fund to rebuild Mosque)
Here, neither Promisor gained anything nor the Secretary suffered.
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7. Contract without Consideration is Void (Exceptions)
 Contract of Agency – An agency with or without Consideration has the
same effect.
Relation b/t
Principal & Agent
is named as
“Contract of Agency”.
Principal • Buyer
Agent
• Friend
(Property
Dealer)
Third
Party
• Seller
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8. Contract without Consideration is Void (Exceptions)
 Gratuitous Bailment – No Consideration for the Bailor (Giver).
Eg: Borrowing a Friend’s Car, or Notes.
Here, Bailee (Receiver) is liable for loss of the property, only if it is caused
by his/her negligence.
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