News By/Courtesy: Nikshetaa Jain | 26 May 2020 17:25pm IST

HIGHLIGHTS

  • consideration must have some values in the eyes of the law
  • consideration must be something which the promisee is not already bound to do
  • consideration must not be adequate

Consideration is defined in Section 2(d) of the Indian Contract Act, 1872, as follows: “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 abstain from doing something, such act or abstinence is called a consideration for the promise.” Consideration means some act, abstinence or promise on the part of the promisee or any other person done at the desire of the promisor. 

Firstly, consideration must have some values in the eyes of the law and must be real. In White v Bluett, the defendant owed a sum of money under a promissory note to his father. The defendant, day and night, complained to his father that he was not treated equally. Thereupon, the father promised to discharge him of all liability in respect of the promissory note, if he stopped complaining. The consideration was not valid; it was illusory. 

Secondly, consideration must be something which the promisee is not already bound to do. Performance of a legal duty is not a consideration for a promise. Performance of a legal obligation is not a consideration for a promise. In Ramchandra Chintaman v Kalu Raju, there was a promise to pa the lawyer an additional amount if the suit was successful. The promise was void as it was the legal obligation of the lawyer to win the case. In Collins v Godefroy, a lawsuit was going on in which Godefroy is a party. The court sent a summons to Collins to appear as a witness. Godefroy promised to reimburse the expenses incurred by Collins. It was held that Godefroy was not obliged to pay as Collins was performing his legal duty.

Thirdly, forbearance to sue is a valid consideration as it is abstinence to do an act. In Debi Radha Rani v Ram Das, a wife was ready to sue her husband for maintenance allowance but had forborne to sue as the husband agreed to pay her a monthly stipend. It was held that promise not to sue is the abstinence to do an act and thus, a valid consideration.

Fourthly, consideration must not be adequate. The courts do not inquire into the adequacy of consideration. The adequacy of consideration is for the parties to consider at the time of the contract. If the consent of the parties is obtained freely, the inadequacy of consideration will not matter. If the consent is not free, the inadequacy of consideration will matter.

 

 

 

Section Editor: Pushpit Singh | 26 May 2020 20:58pm IST


Tags : #consideration, section 2(d)

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