Consideration

Cases
 Problem 1:
Durga Prasad Vs. Baldeo

D had built at his own expense, a market at

the request of the Collector of the District. The
shopkeepers in the market promised to pay D
some amount of money in the market.
D sued the shopkeepers for non-receipt
of commission. Will he succeed ?
D will not succeed because the agreement was
void and the promise to pay commission did
not amount to a contract for want of
consideration because D (the promisee) had
constructed the market not at the desire of the
shopkeepers (the promisors) but at the desire
of the Collector of the District to please him.
Consideration must move at the desire of the
promisor.
 Problem 2 :
CHINNAYYA Vs. RAMAYYA

A, an old lady, by a deed of gift, made over certain

property to her daughter R, with a direction that
the daughter should pay an annuity to A’s brother
(R’s maternal uncle) as has been done by A so far.
R, the daughter, executed a writing in favour
of her maternal uncle C agreeing to pay
the annuity. Afterwards she declined to fulfil her
promise saying that no consideration had moved
from her maternal uncle i.e. the promisee
• Held that the words “the promisee or any
other person” in Sec.2(d) clearly show that a
stranger to consideration may maintain a suit.
Hence the maternal uncle, though a stranger
to the consideration (as the consideration
indirectly moved from his sister A) was
entitled to maintain the suit.
 Problem 3:
Rajalakhi Devi Vs Bhoothnath

There were frequent quarrels and

disagreement between Bhoothnath and his
wife Rajalakhi Devi. He finally executed a
registered document in favour of his wife
agreeing to pay for the separate residence and
maintenance. Rajalakhi Devi went to court
and insisted on specific performance by her
husband of what is stated in the registered
document. Is Rajalakhi right?
 Solution
No, she will not succeed as she is wrong in her
understanding . The agreement was void for
want of consideration because it was not
made out of natural love and affection.
 Problem 4:
Kedarnath Vs.GoriMohammad

Gori Mohammad promised

to contributeRs.1000 towards construction of a
TownHall at Howrah but did not sent in his
contribution.
Kedarnath, the Secretary of the Town Hall on
the faith of the promise, entrusted the work to
a contractor and incurred liability of Rs.500 to
pay him.
Is Gori Mohammed liable?
Yes, Gori Muhammad is liable for the
contribution he promised as Kedarnath has
incurred a liability based upon his promise.
So, under the rule of ‘No consideration No
contract’ Charitable subscriptions , the
contract is valid.
 Problem 5:
Dunlop Pneumatic Tyres Co. Ltd. Vs. Selfridge & Co. Ltd.

S bought tyres from the Dunlop Rubber Co. & sold

them to D, a sub-dealer, who agreed with S not to sell
these tyres below Dunlop’s list price and to pay the
Dunlop Co. £5 as damages on every tyre D undersold.
D sold two tyres at less than the list price and
thereupon the Dunlop Co.sued him for the breach.
Will the company succeed?
No , the Dunlop Co. Could not win the suit as
they were stranger to the contract.
 Problem 6:
A, an old man of feeble sight, signed a bill of
exchange thinking it was a guarantee. There
was no negligence on the part of B .
Is A liable ?
 Solution
No, A is not liable because the parties are
under mistake and there is no consensus ad
idem.
 Problem 7:
Satyam, a minor is supplied with the
necessaries of life by a grocer. He makes out
promissory note in favour of the grocer.
Is the grocer entitled to claim payment under
the promissory note
(a) from minor personally,
(b) against his estate? Justify.
 Solution
No, the grocer cannot claim payment from the
minor personally but he can recover his
grocery payment from his estate i.e property
 Problem 8:
• Raman sold some articles from his shop to
Raghu on credit, not knowing that Raghu is a
minor. The time fixed for payment expired and
no payment was made.
• Sometime after Raghu attained majority,
Raman sued him for the price.
• Will he succeed?
 Solution
• No, Raman cannot recover the amount from
minor after he attains majority as the void
agreements took place with minor cannot be
ratified.
 Problem 9:
Rimpy, being in dire need of money, sells his
new Honda Amaze purchased two months ago
at a cost Rs.7,50,000 for Rs.2,00,000.
Afterwards Rimpy seeks to set aside the
contract on the ground of inadequacy of
consideration.
Will she succeed?
• No, Rimpy will not succeed as the
consideration need not be adequate.
 Problem 10:
• Kittu, a minor aged 17, broke his right arm in a
hockey game. He engaged a physician to set it.
Does the physician have a valid claim for his
services?
 Solution
• Yes, the physician has a valid claim against the
minor as giving medical assistance amounts to
necessaries of life for minor. The property of
minor is liable but he is not personally.
 Problem 11:
• Ramdulari owes RamDubey Rs.1000 but the
debt is barred by Limitation. Ramdulari gives a
letter to RamDubey agreeing to pay him
Rs.500 on account of the debt.
• Is this a valid agreement?
 Solution
• Yes, the agreement is valid under the clause of
No consideration no contract exceptions- Time
barred agreements
 Problem 12:
Thangballi, an adult, said to Sharukh, a minor :
“I will not pay the commission I promised you
for selling my magazines. You are a minor and
cannot force me to pay.”
Is Thangballi right?
 Solution
• No, Thangballi is wrong. Shahrukh can claim
the payment for magazines as the minor can
appeal court on the ground that he may be a
promisee or a benficiary.