Law Of Contract : Consideration

SYNOPSIS

1.Defintion

2.Lawful consideration

3.Privity of contract

4.Exceptions to Rule of Privity

5.Past consideration

6.Position in india

7.Conclusion

CASE LAW:-

Durga Prasad v. Baldeo

 Tweddle v. Atkinson

Consideration is defined in Section 2(d) as follows:

S. 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:

Consideration ingredients:

In order to conclude a valid contract, there must be consideration Consideration, as defined under S. 2(d) involves following elements:

(a) has done or abstained from doing or

(b) does or abstains from doing or

(c) promises to do or abstain from doing something, called a consideration

(d) Such act, abstinence or promise is called a consideration for promise

Ingredients of consideration

  • Act / abstinence must be done at the desire of promisor
  • Such an act or abstinence may be already done i.e. there can be a past  consideration
  • Such consideration may also be a promise to do an act or abstinence i.e.there can be a future consideration
  • Consideration may be given by promisee or any other person under English law, however under Indian law when consideration is there ,it is immaterial  who has furnished it.

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: Plaintiff not entitled to recover commission.

There was no consideration. The expenses made by plaintiff were not at the desire of defendant, but was under order of the collector

Privity of contract:

It is well settled principle under English law that a contract cannot be enforced by a person who is not a party to it, although it may be made for his benefit. This doctrine is known as Privity of Contract.

The Principle was laid down in the case of:

Tweedle V. Atkinson

Fact :- The plaintiff was to be married to the daughter of one Mr.Aana. In consideration of this intended marriage. Mr.Aana and plaintiff’s father entered into a written agreement by which it was agreed that each would pay plaintiff a sum of money. A failed to do so and plaintiff sued his executors.

Held:No stranger to consideration can take advantage of a contract, although made for his benefit.

Exceptions to Rule of Privity

1.Beneficiaries under trust or charge or other arrangement

2. Marriage settlement, Partition or other Family arrangements

Past consideration:-

Position in England:- In England it is an old principle that consideration should be along with the promise.Consideration, being the price of the promise, should be given at the same time when promise is made.

Position in India :- A past consideration may be in respect of

  1.  Past Voluntary services:- a past voluntary service is valid and good consideration,as it is provided under sec-25(2). A past voluntary service means a service rendered without any promise or request and there being a subsequent promise to pay .In India it is valid consideration.
  2. Past service at the request:- Neither sec- 2(d) nor sec-25 lays down any rule regarding past service done at request sec-2 (d) requires that act should be done at promisors desire.

Conclusion

Consideration must be of value- consideration under Indian contract act means ,an act,abstinence or promise on the part of promisee or any other person,at the desire of the promisor.However there is no provision as to adequacy of consideration.

Under English law , consideration must be of some value in the eyes of law. By Anuprita Kulkarni

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