consideration

Consideration may be past, present or future

• Section 2(d) recognizes three kinds of consideration
• When at the desire of the promisor, the promisee or any other person
• Has done or abstained from doing- the consideration is past
• When the consideration for any promise was given earlier and the
promise is made thereafter
• If the act has been done before any promise is made it is called past
consideration
• At the time the act constituting consideration was done, must have
been done at the desire of the promisor
• Eg: ‘A’ requested you to find his lost dog, after you have done, the
same, if ‘A’ promise to pay you Rs.1000 for that, it is a case of past
consideration. For A’s promise to pay you Rs.1000 the consideration is
your effort in finding the dog and the same has been done before A
promised to pay the amount
• Past services voluntarily rendered:
• ICA recognizes only such consideration which has been given at the
desire of the promisor, rather than voluntarily.
• If the consideration has been given voluntarily, it is no consideration
• According to English law past consideration is no consideration
• When one of the parties to the contract has performed his part of the
promise, which constitutes the consideration for the promise by the
other side, it is known as executed consideration or present
consideration
• Eg: A makes an offer of reward of Rs.100 to anyone who finds his lost
dog and brings the same to him. B finds the lost dog and delivers the
same to A. when B does so, that amounts to both the acceptance of
the offer, which results in a binding contract under which A is bound
to pay Rs.100 to B.
• The consideration in this case is executed
• Executory or future consideration:
• When one person makes a promise in exchange for the promise by
the other side, the performance of the obligation by each side to be
made subsequent to the making of the contract, the consideration is
known as executory or future consideration
• Eg: A agrees to supply certain goods to B and B agrees to pay for them
on a future date, this is a case of executory consideration
• There should be some act, abstinence or promise by the promisee,
which constitutes consideration for the promise
• Section 2 (d): When, at the desire of the promisor, the promisee or
any other person has done or abstained from doing, or does or
abstains from doing, or promises to do or to abstain from doing,
something, such act or abstinence or promise is called a consideration
for the promise
• It means that if nothing is done in exchange for the promise, i.e.,
when there is no act, abstinence or promise, there is no consideration
Consideration received by one of the joint
promisors
• When there are several joint promisors but consideration has been
received by only one of them, that is sufficient consideration so as to
bind other joint promisors also
• Case law: Andhra Bank v. Anantnath Goel AIR 1991 A.P.245
• The father received a loan from a bank by the deposit of title deeds of
his immovable property, but the promissory note, to repay the loan
with interest, was signed by the father and his son jointly, in favour of
the bank. It was held that the son was equally liable with his father on
the said promissory note, even though he himself had received no
direct consideration
Consideration need not be adequate
• A contract which is supported by consideration is valid irrespective of
the fact that the consideration is inadequate
• According to explanation 2 to section 25:
• An agreement to which the consent of the promisor is freely given is
not void merely because the consideration is inadequate, but the
inadequacy of the consideration may be taken into account by the
court in determining the question whether the consent of the
promisor was freely given
Consideration must be real
• Consideration should be real and should not be unsubstantial
• Competent and some value in the eyes of law
• Where consideration is physically impossible, illegal, uncertain or
illusory it is not real
• Where A promises to give his new car to B, provided B will fetch it
from the garage, or
• Promise not to bore the promisor is not enough to constitute
consideration
• White v. Bluett (1853)23 L.J. Ex.36
• A son used to complain to his father that his brothers had been given
more property than him. The father promised that he would release the
son from a debt if the latter stopped complaining. After the father’s death
an action was brought by the executors to recover the debt. The son
contended that the father had made a contract to release him from the
debt in consideration for his promise not bore his father.
• It was held that the promise by the son not to bore his father with
complaints in future did not constitute good consideration for the father’s
promise to release him, and therefore, the son continued to be liable for
the debt
Performance of an existing legal duty is no
consideration
• In order to constitute proper consideration there should be a promise
to do something more than what a person is already bound to do
• Doing of something which a person is already legally bound t do is no
consideration
• Case law: Collins v. Godefroy (1831).1 B & Ad.950
• A received a subpoena to give evidence in a case. Thereafter B
promised to pay to A some money for the trouble which was to be
taken by him in appearing in that case. A sued B to recover the
amount promised by B.
• It was held that A having received the subpoena was already under a
public duty to give evidence and therefore the promise by B to pay
did not constitute consideration for the promise