Consideration’ means “something in return”, i.e. quid pro quo that is an essential element to find out the genuine intention of the parties of the promise to create legal relationship. Consideration is an essential component of a valid contract. Consideration is the price for the contract. An agreement without consideration is void and thus not enforceable by law except under certain circumstances. According to Sir Frederick Pollock. Consideration is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.” An agreement without consideration is a bare promise and exnudo pacto non aritio actio, i.e., cannot be held to binding on the parties.
What is a Consideration?
Consideration is the price of the contract and it can be right, interest or responsibility etc. According to section 2(d) of the Indian Contract Act “when at the desire of the promisor, 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.”
When we say that consideration is an act it acquires an affirmative tone. For example A promise to pay ` 10,000 to B if B will sell his mobile to him. When we say that consideration is abstinence or forbearance it acquires negative tone. It means one party agree not to do something in lieu of the promise of other party of the contract. Thus one party may be able to benefit due to the abstinence of another who refrains from some gain.
Example :A offers to sell his car to B for a sum of ` 1,00,000. B accepts the offer. In this contract,
- A is the promisor and it is his desire to sell his car for ` 1,00,000
- B is the promisee and on the desire of A he is purchasing the car for ` 1,00,000.
The consideration for A’s promise, is a sum of ` 1,00,000 while consideration for B’s promise is the car.
Case Law: In Currie v. Misa, it was defined, “A valuable consideration in the sense of the law may consist either in some right, interest, forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other.”
Essentials
- Something should be done or abstained from doing at the desire of the promisor only.
- Promisee or any other person has done or abstained from doing something at the desire of the promisor.
- It can be Past, Present or Future.
- It is not necessary that Consideration must be adequate.
- Consideration must be Real and Not Illusory or Impossible.
- It must be Lawful.
Explanation
- Consideration must proceed at the desire of the Promisor
An act must have been done at the desire or request of the promisor. Voluntary acts or acts done at the desire of the third party is not a consideration in the eyes of law.
Example :
B house is on fire. A rushes to B’s help and later demanded ` 10,000 from B. Is A justified in claiming ` 10,000
No, he is not justified as there is no consideration here. It is a voluntary act of A.
But if A goes to B’s help at B’s request who promises, to give ` 10,000 to A for the help then B is bound to pay. As the consideration for B is to get the help from A and consideration for A’s promise is ` 10,000
In Durga Prasad v. Baldeo,on the order of the collector of a town Durga Prasad built some shops on his own expense in a market. The shopkeepers who occupied these shops promised to pay to Durga Prasad commission on their sales. Durga Prasad sued the shopkeepers when he did not receive the commission. The court held that the promise was not supported by any consideration as the shops were built on the collector’s order and not at the request of the shopkeepers. Therefore there could not be a recovery.
