CONSIDERATION Under INDIAN CONTRACT ACT by VANDANA YADAV

CONSIDERATION under INDIAN CONTRACT ACT:

CONSIDERATION is a benefit that must be bargained for between the parties and is an essential reason for a party entering into the contract.According to Frederick Pollock “Consideration is a price for which the promise of the other is brought and the promise is thus given for value is enforceable”.
Case law : Curie versus Misa, 1875
A valuable consideration, in the sense of law, may consist either of some right, interest, profit or benefit accruing to one party, awesome forbearance, detriment loss or responsibility, given, suffered or undertaken by others.

DEFINITION OF CONSIDERATION:
Section 2(d) of INDIAN CONTRACT ACT deals with CONSIDERATION.

When at the desire of the promisor, the promisee or any other person.Has done or abstain from doing or Does for abstains from doing or Promise to do or abstain from doing somethingSuch act or abstinence or promise is called a consideration for the promise.
Illustration:

A agrees to sell his car to B for rupees 50000/-, here is a consideration for the B, money is the consideration to A.
ESSENTIALS OF CONSIDERATION:
Essentials of valid consideration are:

Consideration must move at the desire of the promisor.
Consideration may be past, present,future.
Consideration must be real and not illusory.
Consideration must be legal.
Consideration is available for both parties.
Consideration for being given for an act, an abstinence appearance of a promise.
CONSIDERATION MUST MOVE AT THE DESIRE OF THE PROMISOR:
The first essential of the consideration is it must be move from the Desire of the promise.
Case law: Durga Prasad vs Baldeo:
D a contractor, constructed a market at the instance of District Collector. Occupants of shop promise to pay D, Commission on articles sold through their shops.Held, there was no consideration because money was not spent by plaintiff in the request of the defendant, but the instance of the third person viz: the collector and, thus the contract was void.

CONSIDERATION MAY BE PAST, PRESENT, FUTURE :
According to English law, past consideration is no consideration. As per Indian law past consideration too, is a consideration.
Case law: Sindha versus Abraham
Sindha is a lady taking care of minor Abraham, after the attaining of the majority I am started earning she demanded him to pay the money which was spent on him.
Held: past consideration is also a valid consideration.

CONSIDERATION MUST BE REAL AND NOT ILLUSORY:
Another most important essential of consideration is that it must be a real transaction but not an illusory if it is an illusory transaction, the consideration is void.
Consideration is not valid if it is:-
Physically impossible.
Legally not permissible.
Uncertain.
Illusory.
CONSIDERATION MUST BE LEGAL:
Consideration must not be unlawful Immoral, illegal, impossible, uncertain, ambiguous, fraudulent or opposed to public policy.

CONSIDERATION IS AVAILABLE FOR BOTH THE PARTIES:
Consideration has to be available for both parties, for example, a person who is selling his motorcycle for rupees 50,000/-, here money is a consideration for the seller and motorcycle if consideration for the purchaser.

CONSIDERATION FOR BE GIVEN FOR AN ACT, AND ABSTINENCE, OF FORBEARANCE OR FOR A PROMISE:
Consideration is given for an act, abstinence, forbearance or a promise other than this, it cannot be considered as a consideration as per INDIAN CONTRACT ACT.

PRIVITY OF CONTRACT:
It is a common law principle which states that the relation between the parties in a contract which entitles themselves to each other but prevents is third party or person from doing so.

PRIVITY OF CONTRACT IN ENGLAND:
In England, the persons other than parties to the contract have no right to enter into the contract even though they are relatives, agents or close associative to the parties of the contract.
Case law: Tweddle vs Atkinson:
In this case, two men who were fathers agreed that if their children got married to each other, both fathers will pay some amount of money to the groom. Their children got married and the groom’s father paid his part money but the bride’s father fails to do so and subsequently died. The groom took action against his father in law’s estate for recovery of the money.

It was held that stranger to the contract cannot take advantage of a contract although made for his/her benefit.

PRIVITY OF CONTRACT IN INDIA:
The concept of Privity of contract in India is different from England, here the stranger or third person to a contract can enter and enforce rights and liabilities if he is benefiting through the contract.
Case law: Chinnaya versus Ramayya.

TOPIC- CONSIDERATION under INDIAN CONTRACT ACT
DATE- 18th MAY, 2021
VANDANA YADAV

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