To form a contract enforceable by law, there must be a valid consideration.According to Section 2(d) of the Indian Contracts Act, 1872, when at the desire of the promisor, the promisee or any other person does or abstains from doing an act, such an act is called the consideration for the promise. Section 2(d) explicitly mentions ‘at the desire of the promisor’, thus an act, abstinence or promise at the desire of the third party is not covered. However, the consideration from the promisee need not benefit the promisor and can move from the promisee as well as a third party.
Executory consideration, previous consideration, or executed consideration are all examples of considerations as given:
Consideration for execution: Each promise is the consideration for the other when consideration consists of promises to be fulfilled in the future. Reciprocal pledges are what they’re called. In such situations, both parties have rights and duties. Executory consideration is a term used to describe a type of consideration.
Past Consideration: Past considerations are admissible under Section 25(2) of the Indian Contracts Act of 1872. In India, previous consideration is defined as a person who has already willingly done something for the promisor.
In Webb v. McGowin, the appellant saved McGowin’s life by stopping a block from falling on his head, but he was hurt in the process. McGowin agreed to give maintenance to the appellant after the event. The appellant only got the maintenance money for a few years before filing an action for maintenance.The court concluded that, even though the promisor had no original obligation to pay, the later commitment to pay for the voluntary act performed for the promisor’s benefit constituted consideration, and so the appellant was entitled to maintenance.
The following elements are required to form a legitimate consideration, according to Section 2(d) of the Indian Contracts Act, 1872:
Consideration must be guided by the promisor’s wishes: There is no legitimate consideration if an act is performed at the request of a third party or willingly. As there is privity to consideration in India, consideration must always move at the will of the promisor. For instance, if ‘A’ observes ‘B’ drowning and saves ‘B’ out of kindness, he cannot subsequently claim any credit or recompense for his efforts because the act was not performed at ‘B’s’ request (promisor).
The promisee’s consideration may shift to anybody else: A foreigner in India might be given consideration under Section 2(d) of the Act. It’s crucial to note, though, that a stranger to consideration is not the same as a stranger to the contract. For instance, ‘X’ gave ‘A’ a car on the condition that he pay B in instalments. However, ‘A’ neglected to make payments and claimed that ‘B’ was not entitled to compensate since ‘A’ had not made payments. However, because Section 2(d) allows a ‘promisee or any other person’ to continue an action for recovery, ‘B’ is permitted to do so.
In the viewpoint of the law, it must be valuable: According to Section 25, lack of consideration does not render a contract invalid, and so the court does not inquire into the appropriateness of the consideration provided. The court, on the other hand, guarantees that the consideration was freely provided and that no deception was involved.
Should be in addition to the promisor’s current obligations: It is not a good consideration if the consideration offered does not add to or differ from the promisor’s previously existing duty.