Consideration under Indian contract act 1872
Definition: In common parlance, consideration refers to something paid to a
person in get back for something else. In felony terminology, it could be
understood as the fee or compensation which must be paid by using the promises
to the promisor for doing or now not doing an act. consideration is important
for a valid contract, in the absence of which a promise cannot be enforceable.
it is able to inhere some advantage, proper or interest, to be obtained by means
of the promisor, or loss, detriment, or obligation inflicting to the promise's
consideration therefore, consideration can be a promise or overall performance
of an act which the events to the agreement change with each other. it is the
base of a settlement.
Regulations for consideration
There are several policies regarding the consideration, discussed as under:
Must flow at promisor's desire:
consideration have to be provided by way of the
promises or another party, as in line with the desire or request of the promisor.
meaning that the responsibility completed need to be according to the promisor's
choice and no longer of promise's personal free will or now not as according to
the choice of the third person.
Additionally proceed from promise or any other birthday celebration:
consideration may pass out from the promise or some other birthday party. here
the phrase another person approach stranger, who is not a party to the
settlement. while the promise or some other birthday celebration plays an act,
as per the preference of the promisor, such an act is appeared as consideration.
Executed and Executory:
When one birthday celebration to a agreement has carried
out his/her part, the consideration is said to be performed for that birthday
party, while the other has just promised to carry out it, the consideration is
said to be executory for that party.
No longer necessarily be adequate:
Consideration isn't necessarily of a selected
price, i.e., it need now not be equal to the price of the promise. this is
because of the fact that something in alternate isn't necessarily of identical
price to something furnished or promised. consequently, what matters is,
consideration should be something of price, as in keeping with law, which the
events are free to decide even as moving into the agreement.
Need to know not be the performance of felony responsibility:
It must not be an
act which someone is sure to perform, as in keeping with regulation. Such
contracts are seemed as void contracts. however, if someone guarantees to do
something which is over and above of what he/she is legally bound to do,
supplied it does not violate any rule or public coverage, then it'll represent
Have to be actual:
It needs to be real, positive and something of cost. It must
not be illusory, vague and legally or physically not possible.
Have to be lawful:
It must be lawful and moral and it have to no longer violate
any public policy, otherwise, it's going to no longer be appeared as a
therefore, consideration want now not be monetary, as an alternative a
forbearance to sue, promise for any other promise, settlement of the dispute,
refraining from something, detriment also can quantity to consideration.
Agreements no longer requiring consideration
consideration is the essence of the contract, without which there may be no
settlement in any respect. but there are positive agreements that are deemed
legitimate and enforceable even without consideration. those are:
- Written settlement based on natural love and affection amidst the
parties, who're in close relation with each other
- Promise to pay someone completely or in part, for the act completed
voluntarily, in the past
- Written promise via the promisor himself or his authorized agent to pay
a time-barred debt.
- contract of agency
- completed gifts
- agreement of Bailment
Types of consideration
There are in particular three varieties of consideration: sorts of consideration
Executory or future consideration:
Executory consideration, because the name
indicates is one which is but to be performed. which means the promise or
obligation might be accomplished in future.
Accomplished or gift consideration:
achieved consideration, manner the only
which is simultaneously supplied whilst the promise is made. that means that the
act which amounts to consideration is fully accomplished.
past consideration refers back to the formerly accomplished
act or forbearance which amounts to consideration has already been provided
before the promise is given. similarly, if consideration for a gift promise is
supplied earlier to the date of promise, it's far seemed as past consideration.
As per English law, there are most effective two sorts of consideration,
i.e., achieved and executory, whilst the beyond consideration isn't always
appeared as consideration, however Indian law deems all of the 3 types.
Written by-Dinesh Kumar Mishra
BA.LLB (8th Semester) -
Kalinga university, Raipur