Consideration; Meaning and Definition.

Meaning; Consideration is one of the most important things in any agreement to be enforceable, it means “something in return”, any agreement to be enforceable there should be things exchange towards both parties.

Example: “A” trying to buy a bike from “B” for 5,000rs, in this instance “bike and 5,000 are the considerations for the agreement for sale.

Definition: The term consideration was defined in “curie V. Misa (1875) LR 10 EX 153 at P. 162, has defined consideration as “a significant consideration in the eye of law may consist either in some right, interest, profit, or benefit accruing to the one party, or some for bearance, and detriment, loss or responsibility given, suffered, or undertaken by the other.

Section 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 ( In India a consideration may be past, present, and future).


  • It must move at the desire of the promisor: consideration must move at the desire of the promisor, but not at the infringement of 3rd Any act done in the interest of the third party is admissible in the agreement of good consideration.

Case: “Durga prasad V. Baldeo LLR (1880)” the plaintiff constructed some shops by the order of the collector. And in the end, the defendant occupied one of the residences and assured to pay commission to the plaintiff and he failed to pay the money

Judgment: The court denied the case and said that there’s no legitimate contract between the two parties under section 25 of the Indian contract act. Under section 2(d) of the Indian contract act without proper consideration, there is no agreement.

  • Consideration must move from the promisee or any other person: In England, law consideration should be from the promise himself, but in Indian law, it can be from the promisee or any other person. In the case of Chinnayya V. Ramayya, LLR )1887) 4 Mad 137. An old lady gave her estate to her daughter and directed her to pay an annuity of Rs 653, to A’s brother. On the exact day, she made a promise to the d to pay the money to his brother. But she failed to pay the money. Plaintiff filed to pay the money. The high court of madras held that the defendant that is liable to pay the amount as the furnished consideration by the defendant’s mother is enough for consideration to enforce the agreement between the plaintiff and defendants.
  • It must be real: Consideration must be real it should not be illusionary, consideration is the main part of the second part of the agreement.

Example: “A” promises to send “B” to MARS at the cost of 5,000, which is illusionary.

  • It need not be adequate: Any consideration need not be adequate. If the consideration has value in the eye of the law, it is accepted.

Example: “A” sells his bike to “B” at the cost of 100, and where the original price of the bike was 1,000.

  • It may be past, present, or future: Under section 2d of the Indian contract act clearly stated that consideration can be passed, present, and future.

Whether the consideration is passed, present, and future its necessary that must have e been given at the desire of the promisor.

But in English law considerations need to be present or future, it cannot be passed.


Past consideration: Where the promisor had received the consideration before the promise date, such consideration is called “past consideration”.

Example: “A” went to his “B” shop while he was passing through the road and bought goods worth 1000 and took them without paying the money. “A” promised to pay the money in the future.

Present contract: when one side of the party made the promise and waiting for the other party to complete the promise is called executed consideration.

Example: “A” declared an offer stating that whoever brings his lost certificate to him they will be rewarded with 5,000. Where “B” brings the certificate and gets rewarded for the contract. Here it’s called an executed contract.

Future consideration: when one person is making a promise for the present work and excepts something in the future is called future consideration.

Example: “A” sold grocery to “B”, and B promised “A” stating that he will be paying the money in the future.  

A contract without consideration is valid .

In general, a contract without consideration is not valid. However but in some instances, the law gives exceptions to a few contracts, under section 25 of the Indian contract act.

Section 25: the contract is valid even without consideration in the following instances:

  • Love and affection

“A” a parent promised his son “B” to buy a bike in writing. The promise is enforceable.

  • Voluntary services

“A” promised to pay RS 500/- to the person who had handed over the missing bag is enforceable.

  • Time barred debt

“A” owes “B” Rs: 1000 but the debt is barred by the limitation act. A signs a written promise to pay “B “Rs 500 on account of the debt. This will be a valid contract and shall not be void for want of consideration.

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