DR.

RAM MANOHAR LOHIA NATIONAL

LAW UNIVERSITY
(SESSION 2018-2019)

Performance of existing contractual duty

as consideration

UNDER SUPERVISION OF SUBMITTED BY

Dr. Manoj Kumar ABHIJAT SINGH
Assistant Professor(LAW) 170101002
2nd
RMLNLU SEMESTER

B.A.L.L.B(Hons.)

1
 INDEX

 ACKNOWLEDGEMENT
 INTRODUCTION
 LITERATURE REVIEW
 RESEARCH QUESTIONS, OBJECTIVES AND METHODOLOGY
 PERFORMANCE OF LEGAL OBLIGATION
 PERFORMANCE OF CONTRACTUAL OBLIGATION
 CONCLUSION
 BIBLIOGRAPHY

2
 ACKNOWLEDGEMENT

. I owe a great sense of gratitude to everyone who helped and supported me during my research.

Mere words will never be enough to offer my deep sense of gratitude towards my Professor for
his precious time and guidance

With his great enthusiasm to teach, profess, and his inspiring nature along with his successful
efforts to teach and explain clearly and easily, with no limitation bounds while explaining the
area of subject.

He also provided necessary guidance whenever needed with innovative ideas and morale boosts.

I would also like thank all the staff of Dr. Madhu Limaye Library who made it easier for me to
browse through all content easily and efficiently.

Despite of my all efforts some mistakes and discrepancies might have crept in.

I am sure humble Professor will overlook them and forgive

3
 “PERFORMANCE OF EXISTING CONTRACTUAL DUTY AS
CONSIDERATION

CHAPTER 1

SYNOPSIS

INTRODUCTION:

“Contracts between human beings are fundamental for the existence or survival of humans
because humans cannot live in isolation. Humans interact, communicate and eventually form
contracts for mutual cooperation and benefit. Contracts have been formed since time immemorial
and different principles or guidelines overlooked the formation of contracts and its
implementation. The modern law of contract which guides our day to day transactions is an
evolved form of the classical theory of contract, which are the general principles of contract
applicable to all contacts. These very general principles of contract are adopted in the Indian
Contract Act of 1872. Sections 1 to 75 of the Contract Act talk about these general principles of
contract. The other sections of the contract act deals with specific provisions.”

“”Now, after reading these general principles of contract it becomes clear that consideration is an
indispensible requirement of a valid enforceable contract. Section 25 of the Indian contract act
stipulates that an agreement which is without consideration is void except for certain exceptions.1
The definition of Consideration is given in section 2 (d) of the Indian contract act which says that
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 from doing, something, such
act or abstinence or promise is called a consideration for the promise. 2 Or in the common
parlance consideration can be defined as an exchange or reciprocity between two sides or
between two parties with the objective or intention of making a valid contract enforceable by
law. Thus, the exchange or consideration is an indispensible condition or requirement of a valid
contract. Now the question is what is a valid contract? The answer in simple terms is that a valid
contract is an agreement which is enforceable by law or that agreement where the parties can
enforce the rights and obligations in the court of law. Thus, enforceability is an important aspect
1
“ Section 25, Indian Contract Act, 1872”
2
“ Section 2 (d), Indian Contract Act, 1872”

4
of a contract. If the terms or the duties of a contract cannot be enforced then it is not a valid
contract. Therefore it is clear that the objective or the purpose or the intention of a contract is the
fulfillment of the contractual obligations or duties. The performance of the reciprocal promises is
the ultimate objective of forming a contract.”

“Now the question of interest of this research project is whether the performance of existing or in
other words pre-existing contractual duty can be taken as “consideration” for some other contract
or another contract. Prima facie this question appears quite unique since the very purpose of a
contract is the performance of duties then how can we take the performance of contractual
obligation as consideration? How can there be reciprocal consideration when one person merely
performs the contractual obligations?”

“These questions have been the centre of considerable debate and scholarly comment, as far as
law of contracts is concerned. Consideration is generally perceived to be something extra than
what the promise is already bound to do. The Contract Act of 1872 does not possess any section
or provision regarding this. But the general principle internationally is that the performance of or
promise to perform a preexisting duty cannot serve as a valid consideration to bind a promisee.
But this general rule has been subject to severe criticism in the light of changes in the
commercial practices. The Indian Contract Act, 1872 tried to cope with this change in
commercial practices by including section 63 which deals with contracts which can be dispensed
with or need not to be performed and dispensing with or remitting performance of the promise by
the promisee.3”

This topic of performance of existing duties as consideration can be dealt with in three ways:

a) When a person is bound to do something by law.

b) When a person is bound to do something by contract.
c) When the performance of contractual obligations is treated as valid consideration for a
valid contract with another person or a third person.

“The rule regarding these three is different. Performance of a legal duty or the execution of some
duty which a person is legally bound to do is no consideration for a promise. But the
performance of legal duty can be considered as consideration when the person exercising the
3
“ Section 63, Indian Contract Act, 1872”

5
legal duty does something outside the scope of his employment. The general rule when a person
is bound to do something by contract is that the performance cannot be considered consideration.
But certain exceptions have been carved out of this rule, keeping in view the changing
commercial practices. And the rule regulating the situations when the performance is treated as
consideration for contract with third party is that the performance of the existing contract can be
treated as consideration for contract with third party.””

LITERATURE REVIEW:

“For the purpose of this research project the researcher has used various primary and secondary
sources. The primary source for this research project is the bare act of Indian Contract Act,
1872.4 The researcher has also studied the commentary of the relevant sections of Pollock and
Mulla on Indian Contract Act, 1872.5 Besides that the researcher has referred to the 13 th law
commission report for information on relevant sections.6 The researcher has also referred to
multiple case laws on the relevant topics for the purpose of this project. Some of these cases are
P. Sashannah Chetti v. P. Ramasamy Chetti,7 Collins v. Godefroy,8 England v. Davidson,9
Glassbrook Bros Ltd v. Glamorgan County Council,10 Ward v. Byham,11 Ramchandra Chintaman
v. Kalu Raju,12 Williams v. Roffey Bros & Nicholls (Contractors) Ltd,13 Pinnel’s case,14 Gilbert
Steel Ltd v. University Construction Ltd.15 The researcher has also referred to various articles.
Some of the articles referred are: The concept and nature of contractual obligation written by
Andras Brahyova,16 Does a preexisting duty defeat consideration written by Arthur L. Corbin,17
Performance of a Pre-“Existing Contractural Duty as Consideration: The Actual Criteria for the

4
“ Indian Contract Act, 1872.”
5
“ Pollock and Mulla on Indian Contract Act, 1872.”
6
“ 13th Law Commission of India Report.”
7
“ P. Sashannah Chetti v. P. Ramasamy Chetti, (1868) 4 MHC 7”
8
: Collins v. Godefroy, (1831) 109 ER 1040”
9
“ England v. Davidson, (1840) 9 LJ (QB) 287”
10
“ Glassbrook Bros Ltd v. Glamorgan County Council, 1925 AC 270 (HL)”
11
“ Ward v. Byham, (1956) 1 WLR 496 (CA)”
12
“ Ramchandra Chintaman v. Kalu Raju, ILR (1877) 2 Bom 362”
13
“ Williams v. Roffey Bros & Nicholls (Contractors) Ltd, (1991) 1 QB 1”
14
“ (1602) 5 Co Rep 117a”
15
“ Gilbert Steel Ltd v. University Construction Ltd, (1976) 12 OR (2d) 19 (CA)”
16
“ Andras Brahyova, The concept and nature of contractual obligation, 39 Acta Jur. Hng. 1 (1998)”
17
“ Arthur L. Corbin, Does a preexisting duty defeat consideration, 27 Yale L.J. 362 (1917-1918)”

6
Efficacy of an Agreement Altering Contractual Obligation written by Burton F. Brody, 18 The
performance of contractual obligations written by Hector J. Cerruti Aicardi. 19”

STATEMENT OF RESEARCH PROBLEM:

“The issue of whether performance of existing contractual duty is a valid consideration isstill a
matter on which the debate is ongoing. There are supporters as well as opponents of the rule
which says that the performance of preexisting duty cannot serve as consideration of another
contract. The matter is yet to settle. So far there is no single landmark judgment on the topic.
There are different case laws dealing with different aspects of the matter and no single judgment
incorporates every aspect of the issue.”

RESEARCH QUESTIONS:

1. Whether performance of preexisting duties can be considered as consideration.

2. What is the position of law regarding performance of existing contractual duty as
consideration in the Indian context?

RESEARCH OBJECTIVE:

1. To better understand the concept of consideration in the contract law.

2. To answer the question whether the performance of pre-existing or existing duties can be
considered as valid consideration.
3. To understand the position of law in this respect in the Indian context.”

“RESEARCH METHODOLOGY: “For the purpose of this research project, the researcher has
employed the doctrinal method of researching. Primary sources like bare acts and case laws have
been used. Secondary sources like text books and articles of different authors have also been
used.””

18
“ Burton F. Brody, Performance of a Pre-Existing Contractural Duty as Consideration: The Actual Criteria for the
Efficacy of an Agreement Altering Contractual Obligation, 52 Denv. L.J. 433 (1975)”
19
“ Hector J. Cerruti Aicardi, The performance of contractual obligations, 3 Inter-Am. L. Rev. 95 (1961)”

7
 CHAPTER 2

PERFORMANCE OF LEGAL OBLIGATIONS:

“”Consideration, it is said, must be something more than what the promisee is already bound to
do and here when we say something more than what the promisee is already bound to do then we
mean bound to do something either by law or by contract. But as far as performance of a legal
duty is concerned the law is that “execution or the performance of a legal duty is not a valid
consideration for a promise.” This principle is firmly established by the” English case law of
Collins v. Godefroy.20” This English principle was adopted in the Indian context by the Madras
High Court in the famous case of” P. Sashannah Chetti v. P. Ramasamy Chetti21” in 1868, four
years before the coming into existence of the Indian Contract Act, 1872. Even after coming into
force the contract act contained no provision on this point.” The material facts of the above
mentioned Chetti case were that the plaintiff was summoned by the court for appearing as a
witness and giving evidence before the court.”The defendant who was also a party to the court
case gave the plaintiff a promissory note to pay him or to compensate him for his inconvenience
or discomfort. The court held the note to be void for absence of any consideration. The court said
that “It is very clear that if a summon had been served, and the note had been given or promise
made to pay money to the plaintiff for the discomfort in the form of loss of time or other
inconvenience, it would have been without consideration because his attending the court session
and the giving of evidence because of the summons served to him would have been merely the
performance of a duty or execution of some duty imposed upon him by law.” 22 “Similarly, in a
hypothetical example, a promise to pay some amount of money to a police personnel for
investigating a crime will be without any consideration provided the police personnel is already
bound to do so by law.””

“But there is an opposite of this principle also.” Lord Denman CJ in England vs. Davidson23 held
that “but doing (executing) or agreeing to do (execute) more than one’s official duty will serve as
consideration.” In the same case the judge also held that he thought that there might be services

20
“ Collins v. Godefroy, (1831) 109 ER 1040”
21
“ P. Sashannah Chetti v. P. Ramasamy Chetti, (1868) 4 MHC 7”

22
Id.
23
England v. Davidson, (1840) 9 LJ (QB) 287

8
which the police personnel or any other public official was not legally bound to execute and
according to the judge in such cases the public official or the police personnel might make it a
ground of a contract. The court in that case allowed police personnel, who had given relevant
information outside the scope of his legal duty, leading to the sentencing and punishment of a
criminal, to recover the money offered by the defendant for such information. But in such cases
the court must confirm that the services rendered by the plaintiffs are really beyond or outside
the scope of legal duty or official duty and not a mere excuse or garb or presence for extracting
money. The rule developed by this case is criticized also by many by saying that because of such
a rule the public officials like police personnel, law makers and judicial officials might sell their
efforts or put their extraordinary endeavors in the market up for sale, to be bought by the higher
bidder giving the maximum amount. The criticism is that this might lead to the
commercialization of public duty.”

“Another illustration of services rendered outside the scope of official obligations is Glasbrook
Bro Ltd vs. Glamorgan County Council.24 In this case there was a strike in a coal mine. The
colliery manager of the coal mine where the workers were striking asked the police for providing
police protection and repeatedly emphasized that the coal mine could be saved only by stationing
a police unit. The police officials were ready to give only as much protection as they considered
adequate but refused to station troops except on the condition that the manager of the coal mine
would pay for stationing the force at some specified rate. The court held that the contract was
valid because there was no absence of consideration. The court held that generally the police
administration or police is legally bound to adequately protect the life and property of the
citizens without demanding any sort of payment or reimbursement from the public or the
individual citizens but in peculiar or specific situations if the police provide some special
protection at the request of some specific individuals then such protection is outside the scope of
their legal duty or they are not legally bound to provide such security or protection and therefore
the police is entitled to demand payment for such kind of special protection provided to specific
individuals.25”

24
Glassbrook Bros Ltd v. Glamorgan County Council, 1925 AC 270 (HL)

25
Id.

9
 CHAPTER 3

PERFORMANCE OF CONTRACTUAL OBLIGATIONS:

“The initial law in this respect is that compliance with legal obligation imposed by a contract
with the promisor can be no consideration for a promise. The leading Indian case law which
accepted this principle is” Ramchandra Chintaman vs. Kalu Raju.26 “The material facts of the
present case are that the plaintiff accepted a vakalatnama or a deed or an affidavit from the
defendant that the plaintiff would act for the defendant in a certain specific case on the payment
of his usual fees. Later on the defendant agreed to pay the plaintiff a certain sum of money as a
special reward if the suit was decided in the favor of the defendant. The case was decided in the
favour of the defendant but the defendant now refused to pay the plaintiff the special reward
which he had agreed to pay. The court decided in the favour of the defendant and held that since
the plaintiff had already accepted the vakalatnama from the defendant therefore he was bound to
give his best service as a pleader and therefore there was no fresh or new consideration moving
from the plaintiff when the defendant agreed that he would pay the plaintiff some special amount
if suit was decided in his favour.27 The better known illustration on this topic is the English case
law of Stilk vs. Meyrick.28 In this case while a ship was on its course of journey, due to some
reasons two of the seamen left the ship and thereafter the captain of the ship formed an
agreement with the remaining crew that if the rest of the crew managed to take the ship back
home then they will get the additional salaries of the two seamen also who had left the ship
midway in the journey, in equal proportion. But later on the captain of the ship refused to give
the additional wages and consequently case was filed where the court held that the agreement
between the captain and the remaining crew for the division of the wages of the persons who had
left the ship on the condition of safely taking the ship to its destination was void because there
was no valid consideration because it was the contractual duty of the mariners who remained
with the ship to exert themselves utmost in any emergency of the voyage to safely bring the ship
to the destination and the desertion by the two crew members was clearly an emergency of the
voyage.29”

26
Ramchandra Chintaman v. Kalu Raju, ILR (1877) 2 Bom 362
27
Id.
28
Stilk vs. Meyrick, (1809) 2 camp 317
29
Id.

10
 “But in another case of similar facts the sailors of a ship had refused to finish the ship journey
because of war risks which were not originally anticipated. The sailors nevertheless agreed to
stay on course of the ship journey on the condition of extra wage. But later on the captain refused
to pay the extra wage citing the earlier cases. The court held that the sailors were entitled to the
extra wages and allowed them to recover it.30 The principle which has evolved out of this
landmark case law of Liston v. owners Carpathian is that in the situations where a party to the
contract is justified in refusing to complete the contract or to go ahead with the contract, an
agreement or promise then to pay the withdrawing party or the refusing party extra money or
wages to prevent the party from withdrawing or refusing to complete the contract, would be
valid. Therefore in such situation the party which promised to pay extra would be liable to pay
and the withdrawing party can claim the extra money.”

Similarly in Williams vs. Roffey Bros & Nicholls (Contractors),” the main contractor found that
his sub-contractor was slow in progress and it was partly due to the low rates allowed to him,
because of this reason and partly because the main contractor would fall under heavy penalties if
the work was not completed in time, he promised more money to the sub-contractor for doing the
same work which he had already undertaken and no additional work. 31 He was held bound to pay
the sub-contractor according to the increased rates. The important point to note in this case is that
this case established an authority or landmark support for the rule of commercial practice or
contractual agreements that a promise to perform a preexisting obligation can amount to good
consideration or valid consideration if there are practical benefits to the promisee. However this
proposition was not accepted to be a working principle in a subsequent case of Selectmov Ltd
where the court held that “when a creditor and debtor who are at arm’s length reach agreement
on the payment of the debt by installments to accommodate the debtor, the creditor will no doubt
always see a practical benefit to himself in so doing.”32”

“It is a generally perceived rule that a promise to pay less than what a debtor is obliged or
required to pay under a contract cannot be taken or considered as a valid consideration. This rule
has been evolved by courts in the Pinnel’s case. In this case the court held that paying lesser
amount of money in lieu of or in satisfaction of a greater amount cannot be a satisfaction for the

30
Liston vs. Owners Carpathian, (1915) 2 KB 42
31
Williams v. Roffey Bros & Nicholls (Contractors) Ltd, (1991) 1 QB 1
32
Selectmov Ltd, re, (1995) 1 WLR 474 (CA)

11
whole amount which was lent in the beginning. The court said that it appeared to the judges that
a lesser sum can never be a satisfaction to the plaintiff for a larger sum of money. But the court
also held that the gift of horse, hawk or robe etc. in lieu or in return of the debt or money
advanced or in satisfaction of the debt is good. This is because the court said that such things like
horse, cattle or robe etc. might be of more value to the plaintiff in the given situation or
otherwise the creditor would not have accepted such thing in satisfaction of the money
advanced.33”

“This Pinnel’s rule that the creditor cannot take less amount of money in satisfaction of the debt
advanced by him, has however been heavily criticized. Like in Couldery vs. Bartrum, Jessel MR
said that the position of English common law is such a creditor can accept things like horse,
cattle, robe etc. in satisfaction of his debt but he cannot accept a less amount of money. 34 The
judge said that this was a very peculiar situation. Similarly was the holding in the case of Weston
Foakes vs. Julia Beers. Earl of Selborne LC held that it would be an improvement and
advancement in the English common law if release or execution of the payment of the whole
debt on the payment of any sum by the debtor which the creditor might be satisfied with or
content with, even if the sum was less than the whole sum advanced by the creditor, were held to
be legal or binding.35 The facts of the case was that Dr. Foakes was ordered by a judgment decree
to pay some money to Mrs. Beer. The doctor made an agreement with her under which he paid
some money immediately and agreed to pay the balance by installments and she in turn agreed
not to enforce the judgment decree of which she was the decree holder. But when the doctor fully
paid the balance she sued the doctor to recover the interest on the judgment-debt. The judgment
of the court was in the favour of the doctor and the principle that the promise to pay less amount
which the creditor might be satisfied and content to receive by way of accord and satisfaction
was reaffirmed by this judgment. But the case went for appeal and the opposite rule that is the
Pinnel’s rule was unanimously upheld by the House of Lords. House of Lords held that Julia
Beers was entitled to the interest on the judgment debt in addition to the judgment debt because
there was no consideration flowing from the judgment-debtor reciprocating her promise to accept
less in satisfaction of the whole.”

33
Pinner’s case, (1602) 5 co Rep 117a
34
Couldery vs. Bartrum, (1881) LR 19 Ch D 394, 399 (CA)
35
Weston Foakes vs. Julia Beers, (1884) LR 9 AC 605

12
EXCEPTIONS TO THE RULE IN “PINNEL CASE”

“A law revision committee of UK in its report of 1937 recommended the abolition of the Pinnel
rule. The courts have tried to avoid the awkward implications of the Pinnel’s rule by admitting
several exceptions to it. Following are few of the exceptions:”

a) Part-payment by a third party

“To avoid the awkward implications of the Pinnel’s rule the courts have evolved the principle
that the part-payment of a debt by a third party might be a good consideration for the discharge
of the whole of the debt. An illustration to this effect is the case of Hirachand Punamchand vs.
Temple.36 In this case the father of a debtor wrote a letter to the creditor and offered to pay the
creditor an amount which was less than the whole money advanced, in full execution or
settlement of the debt which was to be paid by the son. Along with this offer the father had also
enclosed a draft of the said amount which he offered to pay in full settlement of the debt. The
creditor cashed the draft and then brought an action against the debtor for the recovery of the
balance amount. The court gave decision in favour of the debtor and held that the creditor must
be assumed to have accepted the terms of the contract offered by the father of the debtor once he
cashed in the draft and therefore the creditor was not entitled to bring the suit claiming the
remaining amount.”

b) Composition

“Payment of a lesser sum is a valid satisfaction for a larger sum if the payment is made in
pursuance of an agreement of compromise between the creditor and debtor.”

c) Payment before time

36
Hirachand Punamchand vs. Temple, (1911) 2 KB 330

13
“Payment of a lesser sum in lieu of a greater sum is valid if the payment is made before time or if
the payment is made in a different mode or at a different place than appointed in the original
contract.”

d) Promissory estoppel

“This principle has been thoroughly expressed by Bowen LJ that if the persons who have
contractual rights against other persons, by their conduct make the other person believe against
whom he had contractual rights that those contractual rights will either not be enforced or be
suspended for some particular period time, then such persons will not be allowed by the courts to
enforce their rights till the particular period of time, for which the other party believed the rights
will not be enforced, is elapsed or till the particular period of time has passed. 37 This principle is
further explained by an illustration of the case” Thomas Hughes vs. Metropolitan Railway co.38”
In this case a landlord had given notice to his tenant to repair the premises within 6 months,
failing which the lease was to be forfeited. But after this notice the landlord entered into
negotiations with the tenant for the sale of the property but the negotiations failed and shortly
thereafter the period of six months elapsed and landlord claimed the lease agreement to be
forfeited. But it was held by the court that the stipulated period of six months would start not
from the beginning but from the date of the failure of the negotiations between the two parties.
The conduct of entering into negotiations was an implied promise on the part of the landlord to
suspend the notice and the tenant had acted on it by not carrying out the repairs.39”

POSITION UNDER INDIAN CONTRACT ACT

“Indian contract act, 1872 in section 63 provides that “every promisee may dispense with or
remit, wholly or in part, the performance of the promise made to him, or may extend the time for
such performance, or may accept instead of it any satisfaction which he thinks fit.” 40 Thus, this
means that there is no need to apply the Pinnel’s rule in the Indian context. This is a very
37
Birmingham &District Land co London and North Western Rly co, (1888) 40 Ch D 268 (CA)
38
Thomas Hughes vs. Metropolitan Railway co, (1877) LR 2 AC 439
39
Id.
40
Section 63, Indian Contract Act, 1872.

14
progressive provision in the contract act so far as this aspect of contract is concerned. To give an
illustration there is a recent case Narayanrao Jagobaji Gowande Public trust vs. State of
Maharashtra.41 In this case there was a development agreement between an improvement trust
and a land owner. A clause in the agreement provided that the owner is to transfer the plot
earmarked for a primary school to the trust free of cost. It was held not to be void for being
without consideration or being opposed to public policy. The land owner had under the
agreement derived huge benefit by getting his land freed from acquisition and also getting
permission to develop the land and put it to commercial use.42”

CHAPTER 4

EXISTING CONTRACTUAL OBLIGATION TOWARDS THIRD PARTY:

“The relevant question to ask in this section is where a person has contracted to do an act, and a
third person promises to pay him a sum of money if he would go ahead with the performance, is
there a consideration for the promise? The answer to this question seems to be yes. The
performance of existing contractual obligations owed towards one person might be a valid
consideration for another contract. The leading case law on this section is Shadwll vs. Shadwell.43
In this case the plaintiff was engaged to be married to a girl. His uncle, the defendant in the case,
sent him a letter saying that he was very happy to hear about the marriage and as promised to
assist him at the beginning, he would pay him some money annually until the income of the
plaintiff reaches certain level. The majority judgment of the court held that there was sufficient
consideration to sustain the promise. According to the court the promise of the annuity might
have been intended as an inducement to the marriage. The court also held that relying upon the
promise the plaintiff might have made arrangements. The court also held that there was some
benefit to the promisor as the marriage of a near relative is always an object of interest. The same
principle has been followed in India in the High Court of Madhya Pradesh decision in the case of
Firm Gopal Co Ltd vs. Firm Hazarilal Co.44 In this case the court held that a promise to do

41
Narayanrao Jagobaji Gowande Public trust vs. State of Maharashtra, AIR 2016 SC 823
42
Id.
43
Shadwell vs. Shadwell, (1860) 9 CB (NS) 159
44
Firm Gopal Co Ltd vs. Firm Hazarilal Co

15
something which the promisee is already bound to do because of an already existing contract
with a third party, is a good consideration to support a contract.45”

CHAPTER 5

CONCLUSION

“Performance of existing contractual duty as consideration can be deconstructed into three

sections, namely performance of duty with respect to legal obligations, performance of duty
bound by contractual obligations and performance of existing contractual duty as consideration
for another contract. In the first case the performance of legal duty cannot be taken as
consideration of a contract. But there is an exception to this rule and that is the performance of
legal duty can be considered consideration when the act done is outside the scope of official
duty. In second case the rule is that generally the performance of preexisting contractual
obligations cannot be taken as consideration. But this is not an objective test. Depending on the
facts of the case the performance might in certain occasions form consideration for another
contract. Furthermore, there are certain exceptions to the general rule which are devised by
courts to overcome the problems of the rule. Also, the Indian law regarding this is quite
progressive. Section 63 provides the promisee the opportunity to dispense with or remit or
extend the time of the performance. In the third case the rule is that the performance of existing
contractual obligations owed towards one person might be a valid consideration for another
contract.”

BIBLIOGRAPHY

 Indian Contract Act 1872

 Pollock and Mulla on ICA 1872
 13th Law Commission Report

45
Id.

16
 Performance of a Pre-Existing Contractural Duty as Consideration: The Actual Criteria
for the Efficacy of an Agreement Altering Contractual Obligation By Burton F Brody
 The performace of contractual obligations by Hector J. Cerruti Aicardi

17