Q # 03: What is consideration? Explain its exceptions.

1) Introduction
 The meaning of consideration in legal sense is “ something in return”. Simply it can be said
that exchange of something against another thing. Contract without consideration is not
enforceable by the law as well as consideration can be ,in form of money, in form of other
thing or to do something or not to do something , consideration has multiple natures. An
agreement without consideration is void and consideration should be good and valuable.
Consideration is the backbone of the contract it means without it contract cannot create it is
vital element in the law of contract

2) Definition of consideration
 Consideration is a such benefit which becomes the reason of creation of contract between
the parties

Consideration is an object which can be in form of money, in form of to do

something or not to do something or even other than these

 Example
 A agrees to sell his car to B for Rs. 3 lakh. Now B promises to pay such amount to A, this
amount is consideration in this contract or agreement

3) Types of consideration
Following are the three types of consideration

1. Past consideration
 When consideration is given even before the creation of contract. It is consideration that is
already given is called past consideration

2. Present consideration
 If the consideration is given at the time of creation of contract, it is called present
consideration

3. Future consideration
 It the consideration is given after the creation of contract, it is called future consideration
4) Essentials of consideration
Following are the essentials of consideration

1) Consideration should be given by the promisee

2) Consideration should be given by the desire of promisor
3) Consideration should be lawful
4) Consideration should be real
5) Consideration may be, past, present, or future
6) It may be consisted of an act or money or other than these

5) Exceptions
It is a fact that without consideration an agreement cannot be created but it has following
exceptions

1. Love and affection

 If an agreement has been created between the parties for natural love and affection, in such
case consideration is not necessary

2. Contract of agency
 In the contract act of 1872, it has been mentioned that there is no consideration is required
for contract of agency

3. Voluntary services
 A contract made without consideration is also valid if there is a promise to compensate, in
such case there is no consideration is required

4. Time barred debt

 Money a person borrowed and didn't repay but is not legally collectable because too many
years have passed. In such case there is no consideration is required

5. Contract under seal

 Under the English law, a contract which is made in form of a deed under seal is valid even it
is made without consideration

6. Extension in time limit

 If agreement is made for extension in time limit for enforcement of the contract, in such
case, there is no need of any consideration
6) Unlawful consideration
 If in a contract any object which violates the law or based upon a fraud or creates an injury
to others it will be considered unlawful consideration
7) Cases of unlawful consideration
Following are the cases of unlawful consideration which are being given below

1. Prohibited by law
 If the object of an agreement is prohibited by the law, in this case the consideration will
be unlawful

2. Element of fraud
 If the object of an agreement has element of fraud, in this case the consideration will
be unlawful

3. Immoral
 If the object of an agreement is immoral in nature, in this case the consideration will be
unlawful

4. Against public policy

 If the object of an agreement is against the public policy, in this case the consideration
will be unlawful

5. Injury to other person or property

 If the object of an agreement which become cause of an injury to other person or
property, in this case the consideration will be unlawful

6. Unlawful object
 If the object of an agreement is itself unlawful, in this case the consideration will be
unlawful

8) Conclusion
 It said that the consideration is the one of the most important essential of the valid
contract. Without consideration there is not contract but there are certain exception
according to them a contract can be valid without the consideration. Consideration
removes the fear from the mind of other persons those think that there is a chance of
lose in deal. Consideration an object which can be in form of money, in form of to do
something or not to do something or even other than these. Consideration play vital
role in the a valid contract and it is like a backbone in the human body which may help
the being to stand without any support