CONSIDERATION

AND
CAPACITY
By : AVANTIKA MAHAJAN
 CONTENTS
CONSIDERATION
 Meaning
 Valid consideration
CAPACITY
 Minor
 Unsound mind
CONCLUSION
 CONSIDERATION

 Consideration means something in return for the promise. It may be

either some benefit conferred on one party or some detriment suffered
by the other.
 Section 2 (d) of ICA, defines consideration as :—
“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 to abstain from doing something, such act or abstinence
or promise is called a consideration for the promise.”
Example
 A sells his house to B at Rs.
50,00,000.
 Here the money Rs. 50,00,000
is the consideration for the
promise.
 VALID CONSIDERATION
 Consideration to be given ‘at the desire of the
promisor’.
 Consideration to be given ‘by the promisee or any
other person’.
 Consideration may be past, present or future, in so
far as definition says that the promisee:
1. Has done or abstained from doing, or
2. Does or abstains from doing, or
3. Promises to do or to abstain from doing something.
 VALID CONSIDERATION
 There should be some
act, abstinence or
promise by the
promisee, which
constitutes
consideration for the
promise.
CAPACITY
 According to section 11 :–
“Every person is competent to
contract who is of the age of
majority according to the law
to which he is subject, and
who is of sound mind, and is
not disqualified from
contracting by any law to
which he is subject.”
 MINOR
 A person who has not attained the age of
majority is a minor.
 Section 3 of Indian Majority Act, 1875
states that a person is deemed to have
attained the age of majority when he
completes the age of 18 years, except in
case of a person of whose person or
property a guardian has been appointed
by the court, in which case the age of
majority is 21 years.
 MINOR’S AGREEMENT

 Void ab initio
 Landmark case :
Mohori Bibee v. Dharmodas Ghose
 Citation to the case —
(1903) 30 I.A. 114 (P.C.).
 UNSOUND MIND

 A person who is not capable of

understanding to form a contract and to
form a rational judgment as to its effect
upon his interests.
 Insane
 Drunkenness
 Person in lunatic asylum
 Case : Chacko v. Mahadevan A.I.R. 2007
S.C. 2967
 CONCLUSION

 Consideration is important to form a contract.

 Consideration should be lawful.
 To form a contract, the both parties must be
competent.
 Consideration and competency for the
formation of a contract is an essential to a
valid contract.
THANK YOU