Consideration

Section 2(d) of the Indian Contract Act defines the term

consideration as follows-
When at the desire of the promisor, the promisee or any other person
Has done, or abstained from doing something;
                      Or
Does or abstains from doing something;
                      Or
Promises to do, or to abstain from doing something;
Then such act, abstinence or promise is called a consideration for the
promise.
In short, the term consideration means ‘something in return’
i.e. ‘QUID PRO QUO’.
 
Pollock- “the price for which the promise of the other is bought, and
the promise thus given for value is enforceable”.
Blackstone- “the recompense given by the party
contracting to the other”
In Currie v. Misa, Lush J. define the term consideration as
follows-
 “A valuable consideration, in the sense of the law, may
consist either in some right, interest, profit or benefit
accruing to the party, or some forbearance, detriment, loss
or responsibility given, suffered or undertaken by other”.
Illustration- A agrees to sell his car to B for Rs. 50,000.
Here, B’s promise to pay the sum of Rs. 50,000 is the
consideration for A’s promise to sell the car, and A’s
promise to sell the car is the consideration for B’s promise
to pay the Rs. 50,000.
Essential elements of consideration
Consideration should be passed at the request of
offeror:- offeree should send only such consideration which is
wanted by the offeror. In the case where offeree sends unwanted
consideration, he has no right to claim counter
consideration. (Durga Prasad v. Baldeo)

Consideration may move from a promisee or any other

person:- In Indian law, according to section 2(d) of the Indian
Contract Act, consideration may move from the promisee or if the
promisor has no objection, from any other person.

In English law, consideration should move from promisee only.

Though it is said so English law has given an exception i.e there
should be blood relation between the promisee and that other
person who is sending the consideration. (Dutton v. Poole)
Consideration need not be adequate:- Consideration of the
contract need not have equal magnitude. The inadequacy of
consideration will not infect the validity of the contract. 
(Thomas v. Thomas)

Consideration must be lawful:- Presence of unlawful

consideration makes the contract illegal and hence void.
Illustration- A promises to maintain B’s child and B promises to
pay A Rs. 1,000 yearly for the purpose. Here, the promise of each
party is the consideration for the promise of the other party. They
are lawful considerations.

Consideration must be real:- Consideration should not be of an

illegal contract. It must be a believable concept.
Types of consideration
Consideration is of the following five kinds 
Past Consideration- Past consideration is something wholly done,
forborne, or suffered before the making of the agreement.

  Illustration:- A saves B’s life. B promises to pay A Rs. 21,000 out of

gratitude. Here, the consideration is past, because A did nothing or
refrained doing anything on account of B ’s promise. Whatever he
did, he did before B’s promise was made.

 Present Consideration- The consideration which moves

simultaneously with the promise is called present consideration or
executed consideration.
   Illustration:- X buys an article from a shop and pays the price
immediately. The
    Consideration moving from X is present or executed consideration.
 Future Consideration- This type of consideration is a promise to
do or abstain from doing something in the future. Sometimes
executory consideration is also known as a future consideration.
  Illustration:- A promises to pay a sum of money to B in
consideration of B’s
     promise to delivers a book for A. As B’s promise has not yet been
performed, it is        
      executory.
 Unreal Consideration- When a consideration exists only in words,
and not in fact. Then such consideration is known as unreal
consideration for a promise.
 Illustration:- A promises to pay B, Rs. 2,000 on a particular day, in
consideration of a promise by B to pay A Rs. 500 at the same time,
the consideration is ‘unreal’ or ‘illusory’, and the promise will be
regarded as merely a gratuitous promise by A to pay B, Rs. 1500.
Unlawful Consideration- S.23 of the Act describe the term
unlawful consideration. A consideration is said to be unlawful if-
It is forbidden by law;
                    Or
It would defeat the provision of any law;
                    Or
It Is fraudulent;
                     Or
Involves or implies injury to the person or property of another;
                      Or
It is regarded as immoral or opposed to public policy, by the Court.
Illustration- A, B and C enter into an agreement for the division
among them of gains acquired or to be acquired, by them by fraud.
The agreement is void, as its object is unlawful.
Exceptions to Consideration:-
Section 25 of the Contract Act lays down a few exceptions when an
agreement made without consideration is not void.

Exception 1- Natural Love and Affection

A written and registered agreement based on natural love and
affection between near relatives is enforceable without
consideration. The expression ‘near relative’ will include parties
related by blood or marriage.

Exception 2- Past Voluntary Service

A promise to compensate a person, who has already voluntarily done
something for the promisor, or something which the promisor was
legally compellable to do, is enforceable. However, such service
should have been rendered voluntarily and without promisor’s
knowledge, and for the promisor only.
For example, a promise made after attaining the age of majority to
pay for goods supplied to the promisor during minority was held to
be within the exception.

Illustration:- A finds B’s mobile phone and gives it to him. B

promises to give Rs. 100. This is a contract.

Exception 3- Time-barred Debt

A promise to pay a time-barred debt is enforceable.

Illustration:- X owes Y, Rs. 1,000, but the debt is barred by the

Limitation Act. X signs a written promise to pay Y, Rs. 500 on
account of the debt. This is a contract.
Durga Prasad v. Baldeo:-

Facts : The plaintiff on order of the Collector, built at his own

expense certain shops in market. The defendant, who promised to
occupy the shops in consideration of expenses being made by the
plaintiff in construction and promised to pay him commission on
articles sold. The plaintiff sued the defendant for non payment of
commission.

Held:  The court held that the claims for the plaintiff were rejected
because there is no proper contract between the plaintiff and the
defendant mainly the contract has no proper consideration.
Contract without consideration is void. The promissory has no
personal benefit about the contract. The contract was done without
the intention of the promissory. So the contract is void.
Unlawful Consideration- S.23 of the Act describe the term
unlawful consideration. A consideration is said to be unlawful if-
It is forbidden by law;
                    Or
It would defeat the provision of any law;
                    Or
It Is fraudulent;
                     Or
Involves or implies injury to the person or property of another;
                      Or
It is regarded as immoral or opposed to public policy, by the Court.

Illustration- A, B and C enter into an agreement for the division

among them of gains acquired or to be acquired, by them by fraud.
The agreement is void, as its object is unlawful.
Exceptions to Consideration:-
Section 25 of the Contract Act lays down a few exceptions when an
agreement made without consideration is not void.

Exception 1- Natural Love and Affection

A written and registered agreement based on natural love and
affection between near relatives is enforceable without
consideration. The expression ‘near relative’ will include parties
related by blood or marriage.

Exception 2- Past Voluntary Service

A promise to compensate a person, who has already voluntarily done
something for the promisor, or something which the promisor was
legally compellable to do, is enforceable. However, such service
should have been rendered voluntarily and without promisor’s
knowledge, and for the promisor only.
For example, a promise made after attaining the age of majority to
pay for goods supplied to the promisor during minority was held to
be within the exception.

Illustration:- A finds B’s mobile phone and gives it to him. B

promises to give Rs. 100. This is a contract.

Exception 3- Time-barred Debt

A promise to pay a time-barred debt is enforceable.

Illustration:- X owes Y, Rs. 1,000, but the debt is barred by the

Limitation Act. X signs a written promise to pay Y, Rs. 500 on
account of the debt. This is a contract.
Durga Prasad v. Baldeo:-

Facts : The plaintiff on order of the Collector, built at his own

expense certain shops in market. The defendant, who promised to
occupy the shops in consideration of expenses being made by the
plaintiff in construction and promised to pay him commission on
articles sold. The plaintiff sued the defendant for non payment of
commission.

Held:  The court held that the claims for the plaintiff were rejected
because there is no proper contract between the plaintiff and the
defendant mainly the contract has no proper consideration.
Contract without consideration is void. The promissory has no
personal benefit about the contract. The contract was done without
the intention of the promissory. So the contract is void.