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CONSIDERATION

According to Section 2(d)


Considerationisdefinedas: "When at
the desire of the promisor, the promisee
has done or abstained from doing, or
does or abstains from doing, or promises
to do or abstain something, such
anactor abstinence or promise is
calledconsiderationfor the promise
ESSENTIALS
1. At the desire of the promisor;(Promissory
Estoppel)
. An act shall not be a good consideration
for a promise unless it is done at the
desire of the promisor -----Durga Prasad
Vs. Baldeo
. Acts done at the request of the promisors
desire furnishes a good consideration --
Kedar Nath Vs. Gorie Mohamed ;
Promises of Charitable nature becomes
enforceable ---
Dist. Board of Ramnad Vs. Mohd. Ibrahim;
Doraswami Iyer Vs.Arunachala Ayyar;
Abdul Aziz Vs. Mazoom Ali ( Not
applicable in case of unilateral promise
i.e in the absence of promisees promise)
A unilateral contract cannot be revoked
once the other party entered on
performance of the act, but the contract
would cease to be binding if the party left
it----
Errington Vs. Errington
Doctrine of Promissory Estoppel:

Promissory estoppel is derived from equity: It is one of


several kinds of estoppel all of which can be said to be
mechanisms for enforcing consistency

Promissory estoppel basically prevents a party to a contract


from acting in a certain way because they promised not to
act in that way, and the other party to the contract relied on
that promise and acted upon it.

Promissory estoppel occurs when there is a contractual


relationship between parties. Like when there is a legal
relationship between the promisee and the promisor
Requirements of promissory estoppel:
1) There is a pre-existing contractual
relationship;
2) One party to that contract makes a clear
promise that they will not fully enforce their
legal rights under that contract;
. 3) The promisor intends that promise be
relied upon and promisee does in fact rely
upon it.
4) It would be inequitable for promisor to go
back on (resile from) their promise.
Promissory Estoppel as against and its
agencies Government Agencies
UOI Vs. Indo Afghan Agencies
Pournami Oil Mills Vs. State of Kerala;
Amrit Banaspati Co Vs.State of Punjab;
2. Promisee or any other person (Privity
of consideration):
Duttton Vs. Poole;
Tweddle Vs. Atkinson;(The Court of
Queens Bench overruled its earlier
decision);
Chinnayya Vs. Ramayya
3. consideration may be past, present or
future:
(a) Past consideration If the act has
been done before any promise is made.
According to English law past act at the
request of the promisor is good
considerationLampliegh Vs. Brathwait
In Indian law past consideration is a good
consideration ---Sindha Shri Ganapath
Singh Vs. Abraham;
(b)Present Consideration -----When the
consideration for a promise is given
simultaneously with the promise.
(c) Future consideration It is a promise
to do or give something in return in
future for the promise.
4. Consideration must be of some value
and ----
White Vs. Bluett;
Kulasekara Perumal Vs. Patakutty ;
Need not be adequate :
De La Bere Vs. Pearson;
A.Lakshmana Swamy Mudaliar Vs. LIC
5.consideration must be real and unlawful:
Forbearance to sue is a good consideration

6.Consideration must be something which the


promisor is not already bound to do:
Performance of a legal duty is no consideration
for a promise;
A Promise to perform an existing duty is
sufficient consideration to support a promise,
so long as there is nothing in the transaction
which is contrary to the public interest
Performance of a legal duty is no
consideration for a promise--
Collins Vs. Godfrey;

R.Sashannah Chetti Vs. Ramaswami

chetti;
Exceptions:
1. Services rendered out side the scope of
official obligations
Glassbrook Brothers Ltd Vs. Glamorgan

County Council.
2. Legal obligations imposed by a contract
Ramchandra Chintaman Vs. KaluRaju
Privity of Contract or Doctrine of Privity:
Dunlop Pneumatic Tyre co Vs. Selfridge &
Co;
Jamna Das Vs. Ram Autar;
Beswick Vs. Beswick;
Exceptions:
1.Beneficieries of the contact i.e, under
Trust or Charge or other Arrangements;
Rana Umanath Baksh Singh Vs.Jang
Bahadur;
Gregory & Parker Vs. Williams;
2. Marriage Settlement, Partition & other
Family Arrangements:
Khwaja Muhammad Khan Vs. Hussaini
Begum;
Rose Fernandez Vs. Joseph Gonslaves;
Shappu Ammal Vs. Subramaniyam
3. Acknowledgement or Estoppel:
Devraja Vs. Ram Krishnaiah;
Kshirodebehari datta Vs. Mangobinda
Panda;
4. Covenants running with land:
Tulk Vs. Moxhay;
Smith & Snipes Hall Farm Ltd Vs. River
Douglas Catchment Board
NUDUM PACTUM
Ex-nudo Pactum non oritur actio i.e, out
of a naked pact, no cause of action can
arise.
An agreement without consideration is
void.
A promise in order to be enforceable
must have consideration, because only a
consideration can establish legal
obligation and create legal rights
between the parties.
Sec.25 An agreement made without
consideration is void unless-
(1) It is in writing and registered; or
(2) Is a promise to compensate for
something done; or
(3) is a promise to pay a debt barred by
limitation law;
Expl.IGift;
Expl-II ---- Inadequacy of consideration
Exceptions
1. Natural love and affection;
Raj lukhy Dabee Vs. Bhoothnath
Mookerjee;
Bhiwa Vs. Shivaram ;
2. Past voluntary service;
Sindha Shri Ganapath Singh Vs.
Abraham;
3.Time-barred debt:
R.Suresh Chandra & Co Vs. Vadnese
Chemical Works
4.Gift
5. Agency;(Sec.185)
6.Remission(Sec. 63)
7. Contract of Guarantee (Sec.127)
Rule in Pinnels Case
payment of a lesser sum on the day in
satisfaction of a greater, cannot be any
satisfaction for the whole, because it
appears to the Judges that by no
possibility, a lesser sum can be a
satisfaction to the plaintiff for a greater
sum: but the gift of a horse, hawk, or
robe, etc. in satisfaction is good. For it
shall be intended that a horse, hawk, or
robe might be more beneficial to the
plaintiff than the money.
Foakes Vs.Beer
Couldery v Bartrum

"According to English common law a


creditor might accept anything in
satisfaction of his debt except a less
amount of money. He might take a horse,
or a canary, or tomtit if he chose, and
that was accord and satisfaction; but, by
a most extraordinary peculiarity of the
English common law he could not take
lesser than what was actuallydue; that
wasnudum pactum."
Exceptions
1. Alternative performance;
2. Payment before time;
3. Payment by a third party to contract;
. Welby Vs. Drake;
. 4.Promissory Estoppel;
. Central London Property Trust Ltd Vs.
High Trees House Ltd;
. Hughes Vs. Metro politan Railway Co
Pinnels Rule in India