CONSIDERATION

Definition-
• When
• At the desire of the promisor,
• Promisee or any other person
• Has done or abstained or, does or
abstains or promises to do or to
abstain from doing
• Something
• Such act, abstinence or promise is
called consideration for the promise.
Every Contract consists of two parts:
• promise and
• consideration for the promise.

Promises are often made in return for a

promise, for example, a buyer
purchases the goods for a price. Price
for the promise is consideration here.
Promise for a promise in return is
'consideration'
RULES RELATING TO
CONSIDERATION
• Consideration must move at the desire of the
promisor.
• Consideration may move from the promisee or
any other person.
• Consideration may be past, present or future.
• Consideration may be an act of doing or
abstaining from doing something or it may be an
act of forbearance or abstinence.
• Consideration need not be adequate.
• Consideration must be real and not illusionary.
• Consideration must not be unlawful, illegal,
immoral or opposed to public policy.
Importance of
Consideration
• According to Section 25 an agreement
without consideration is void

• Exceptions:
1. Agreement made on account of natural
love and affection.[Section 25(1)]
2. Promise to compensate for past voluntary
services. [Section 25(2)]
3. Promise to pay a time-barred debt.
[Section 25(3)]
CARLILL
V/S
CARBOLIC SMOKE BALL
CO.
• FACTS
The defendant company manufactured a drug called
‘smoke balls’ and claimed it to be anti-influenza.
It published an ad in newspapers saying that any
person who consumes smoke balls 3 times a day
for 2 weeks and yet being attacked by influenza
will get a reward of pounds 100.
Mrs. Carlill consumed smoke balls as directed but
unfortunately got an attack of influenza. She,
therefore, claimed the reward from the company.
The company refused.
?
• 1. Is the advertisement an offer or an
invitation to offer?
• 2. If it is an offer, who is the offeree? Can the
offer be made to the whole world at large?
• 3. Is the offer too vague to materialise into a
valid contract?
• 4. Was there any communication of
acceptance from Mrs. Carlill?
• 5. What was the consideration from Mrs.
Carlill?
Thanks