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In what cases a contract without consideration is not valid?

In what cases a contract without consideration is not valid?

Owlgen
Course: B.Com

1 Answer

There are certain essential features that are necessary for consideration to be valid and accepted legally, which are known as legal rules for consideration. Thus it can be said that the contract must contain the following essential features of consideration, enlisted as follows:

Consideration must move at the desire of the promisor:

It is important that the consideration is supplied at the desire of the promisor so as to make a contract binding and enforceable. The contract is not considered valid if the act is done at the desire of a third party and not the promisor. For example, D constructed a market at the instance of the Collector of a district. The occupants of the shops in the said market promised to pay D a commission on articles sold through their shops. Therefore, it was held that there was no consideration because the money was not spent by the plaintiff at the request of the defendants but voluntarily for a third person, thus the contract was void.

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Consideration may move from the promisee or any other person:

The consideration can move from a stranger. This is in reference to the doctrine of constructive consideration. Where the term any other person, that is a person other than the promisee, is technically referred to as stranger to consideration. In other words, if there is a consideration fora promise, it is immaterial who furnishes the same.

Consideration may be past, present or future:

There are three types of Considerations, namely: Past Consideration, Present Consideration and Future Consideration.

Past Consideration: The words used in Section 2(d) are has done or abstain from doing refer to past. Past consideration is something wholly done, forborne or suffered before the making of the agreement. For example, A, a minor was given the benefit of certain services by the plaintiff. The plaintiff rendered those services, not voluntarily but at the desire of A. These services were continued even after majority at the request of A, who subsequently promised to pay an annuity to the plaintiff. It was held that the past consideration was a good consideration.

Present Consideration: The consideration which moves simultaneously with the promise is referred to as present consideration. For example, cash sales.

Future Consideration: Wheal the consideration is to move at a future date, it is referred as future consideration. It converts into a promise to be performed in the future. For example, A promises B to deliver him 1000 bags of wheat at a future date, to which B promises to pay for it on delivery.

Consideration must be of some value: According to Section 2(d) of the Indian Contract Act, abstinence or promise on the part of the promisee or any other person which has been done at the desire of the promisor. This means that even a small act will be sufficient enough to make a good consideration.

Consideration must be legal: The consideration which is illegal is not enforceable by law That is it cannot be considered as a real consideration.

April 14, 2019
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