CONSIDERATION

CONSIDERATION
Essential element of a valid contract Price of promise Contract without consideration is void (Sec.25)

Definition
According Sec 2(d) 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 or to do or abstain from doing something, such act or abstinence or promise is called a consideration for a promise

Rules Relating to Consideration

1. Consideration must be provided at the desire of the promisor 2. Consideration may move from the promisee or any other person 3. Consideration may be an act, or a promise to do something or to abstain from doing something

Rules Relating to Consideration

4. Consideration may be past, present or future 5. Consideration need not be adequate 6. Consideration must be something which the promisor is not already bound to do

Rules Relating to Consideration

7. Consideration must be real and not illusory
Physical Impossibility Legal Impossibility Uncertain Consideration

Rule of no consideration, no contract

According to Section 25 an agreement made without consideration is void

1. Agreement made on account of natural love and affection

Exception to no consideration, no contract

2. Promise to compensate for voluntary services 3. A promise to pay a time-barred debt 4. A completed gift 5. Contract of agency

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