CONSIDERATION

LECTURE OUTCOME
• Apprehend the essentials for a valid
contract

• Comprehend the exceptions of contract

without consideration
 Consideration is defined as price of promise

OR

Quid pro quo – something in return

This means that when a party to an agreement

promises to do something, he must get
something in return.
DEFINITION
Section 2 (d) Indian Contract Act,
“ When at
the desire of the promisor, the promisee or any
other person has done or abstain from
doing, or does or abstain from doing, or
promises to do or abstain from doing
something, such act or abstinence or promise
is called consideration.”
 “Consideration is a price for which the
promise of the other is bought, and the
promise thus given for value is enforceable”
 Example

A agrees to sell his house to B for Rs.10000.

Here B’s promise to pay Rs.10000 is the
consideration for A’s promise to sell the
house, and A’s promise to sell the house is a
consideration for B’s promise to pay
Rs.10000.
Consideration May be :
• An act - means doing of something.
e.g. Guarantee by A
• An abstinence – promising not to do
something .
e.g. tenant promise not to file a case
• A return promise – the promise of each party
is the consideration for each other
e.g. promise to sell the house
 Legal Rules : Consideration

1. It must move at the desire of the promisor

(Case : Durga Parsad v. Baldeo – market
improvement )
 Legal Rules : Consideration
2. It may move from promisee or any other
person on his behalf(immaterial who
furnishes it)
Case : Chinnaya v. Ramayya
 Legal Rules : Consideration
3. It need not be adequate
 Legal Rules : Consideration
4. Consideration must be real and not
illusory:
- physical impossibility
- legal impossibility
- uncertain consideration
- illusory consideration
 Legal Rules : Consideration
5. It may be past, present or future
- past (when consideration for present
promise has been given in past)
- present/executed (when consideration given
simultaneously )
- future/ executory (when consideration is to
pass subsequently to the contract)
 Legal Rules : Consideration
6. It must not be performance of existing
duties
 Legal Rules : Consideration
7. It must not be illegal, immoral or opposed
to public policy
 Legal Rules : Consideration
8. It must be ‘something of value’
Thank You