EXCEPTIONS WHEN AGREEMENT WITHOUT CONSIDERATION IS

VALID

According to Sec 25 “An Agreement without consideration is void unless-

(1) it is expressed in writing and registered under the law for the time being in force
for the registration of documents, and is made on account of natural love and
affection between parties standing in a near relation to each other; or unless
(2) it is a promise to compensate, wholly or in part, a person who has already
voluntarily done something for the promisor, or something which the promisor
was legally compellable to do; or unless.
(3) It is a promise, made in writing and signed by the person to be charged
therewith, or by his agent generally or specially authorized in that behalf, to pay
wholly or in part a debt of which the creditor might have enforced payment but
for the law for the limitation of suits.

In any of these cases, such an agreement is a contract.

Illustrations
(a) A promises, for no consideration, to give to B Rs. 1,000. This is a void agreement."
(b) A, for natural love and affection, promises to give his son, B, Rs. 1,000. A puts his
promise to B into writing and registers it. This is a contract."
(c) A finds B’s purse and gives it to him. B promises to give A Rs. 50. This is a
contract."
(d) A supports B’s infant son. B promises to pay A’s expenses in so doing. This is a
contract."
(e) A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs a written
promise to pay B Rs. 500 on account of the debt. This is a contract."
(f) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A’s consent to the agreement
was freely given. The agreement is a contract notwithstanding the inadequacy of the
consideration."
 (g) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A denies that his consent to the
agreement was freely given." The inadequacy of the consideration is a fact which the
Court should take into account in considering whether or not A’s consent was freely
given.

Hence, the exceptions to the Doctrine of Consideration as per The Indian Contract Act
are:

I. Natural love and Affection

A written and registered agreement which is based on natural love and affection
between kins is enforceable without consideration. In Rajkukhy Dabee v Bhootnath
Mookerjee1.

The defendant promised to pay his wife a fixed sum of money every month for her
separate residence and maintenance. The agreement was a registered document in
which certain quarrels and disagreement between the two were mentioned. The Calcutta
High Court refused to regard the agreement as one falling under this exception. The
court could find no trace of affection between the parties whose quarrels had compelled
them to separate. In this exception, it is necessary that the agreement is entered into
with love and affection.

The decision of Bombay High Court in Bhiwav Shivaram2, A sued B his brother for a
share in certain lands. But the suit was dismissed as B solemnly affirmed that the
property was not ancestral and agreed by registers writing to give A one-half of the
same property. The present suit was born to obtain that share.  The plaintiff admitted
that he and his brother had been on bad terms. But in spite of the strained relations, the
court held that this is just a case to which section 25(1) should be applied. The
defendant had such natural love and affection for his brother that in order to be
cancelled by him was willing to give him his property

1
1900) 4 Cal.WN 488.
2
Bhiwa v. Shivaram (1899) 1 Bom LR 495.
II. Past voluntary service

A promise to pay for a past voluntary service is binding and such agreements don’t
require an exception. It is necessary that services are rendered voluntarily. For example,
If A supports B’s infant son and B promises to pay A’s expenses in so doing. This is a
contract. Noting that B was legally bound to support his infant son. As per this
exception, the promise must be to compensate a person who has himself done
something for the promisor and not to a person who has done nothing for the promisor.

Thus, where B treated A during his illness but refused to accept payment from A; being
friends out of gratitude promises to pay ₹ 1,000 to B’s son D, the agreement between A
and D is void for want of consideration as it is not covered under this exception.

III. Time-barred debt

A written promise to pay a debt barred by the Limitation Act is enforceable even
without consideration. The agreement must be signed by the promisor or by his agent or
any other person authorized by him.3 For example, A owes B Rs 1,000. The debt is
time-barred by the Limitation Act. A sign a written promise to pay B the sum of Rs
1,000. This is a valid contract and no consideration is required. A cheque issued for a
time-barred debt falls under section 138 of the Negotiable Instruments Act 4 in the view
of Sec 25(3)5.

IV. Completed gift 

The gift presented by a donor and donee by the receiver will be a valid agreement even
without consideration. Thus, in the agreements made by way of gift, consideration is
not necessary. In Vasant Rajaram Narvekar v Ankusha Rajaram Narvekar 6gift by
mother to her minor son under gift deed with the right to property up to her lifetime.

3
A.V. Murthy v. B.S. Nagabasavanna, Appeal (crl.) 206 of 2002.
4
The Negotiable Instruments Act§ 138.
5
The Indian Contract Act, 1872 § 25(3).
6
Vasant Rajaram Narvekar v Ankusha Rajaram Narvekar1995 (3) BomCR 196
The son kept it with his father and did not repudiate on attaining majority. Thus,
accepted and irrevocable.

V. Contract of agency

 Section 185 specifically states that no consideration is necessary to create a contract of

agency. Thus, when a person is. appointed as an agent, his appointment agreement is
valid without consideration. An agent gets the commission as remuneration, but no
consideration is necessary at the time of appointment agreement is made.

Illustrations

1. A offers to sell his house to B for a sum of Rs. 50,000. B accepts the offer. In
this contract, for A’s promise, the consideration is a sum of Rs. 50,000 while
for B’s promise consideration is the house.

2. A, out of his love and affection, promises to give his wife, Rs. 10,000. This
promise is put into writing and is registered. It will be a valid contract without
consideration.

3. A owes B Rs. 2,000 but the debt is barred by the Law of Limitation. A sign
written promise to pay B Rs. 1,000 on account of the debt. This is a valid
contract without consideration.

4. X treated Y during his illness and promised to pay Rs. 1,000 to Y’s son Z, the
agreement between X and Z is void for want of consideration as it is not
covered under this exception.

5. After persistent quarrels and disagreement between husband and his wife, the
husband promised in writing to pay his wife, a sum of money for her
maintenance and separate residence. The agreement was also registered. It was
held that the promise was not enforceable because it was not entered out of
natural love and affection.