Consideration is necessary for the formation of contract. Section 10 of the Indian Contract Act 1872 provides, " All agreements are contracts if they are made by the free consent of the parties and competent to contract, for lawful consideration and with a lawful object and are not hereby expressly declared to be void. Section 25 of the said Act lays down the general rule that " an agreement without consideration is void.
1) Meaning of Consideration :
Consideration is necessary for the one formation of a contract. It means "something return". It is the price paid for contract. It must be Lawful.A contract without consideration is void.
Example :
Sale of Car. In a contract for sale of a car is consideration for one party, while the price is consideration for the other party.
2) Definition of Consideration
(a) Pollock :
According to Pollock Consideration is the price for which the promise of the offer is brought, and the promise thus given for value is enforceable.
(b) Blackstone :
According to Blackstone consideration is the recompense given by the party contracting to the other. It is the price of the promise.
(c) Justice Peterson :
According to Justice Peterson consideration means something which is of some value in the eyes of law. It may be some benefit to the plaintiff or some detriment to the defendant.
(e) Denning L. J :
According to Denning L. J, Consideration is cardinal necessity of the formation of contract. Consideration must be something which is of some value in the eyes of law.
Section 2(d) of the Indian Contract Act, 1872 defines consideration -
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;
3) Essential elements of Consideration :
i) Consideration must move at the desire of the promisor
ii) Consideration may move from the promisee or any other person
iii) Consideration must be real not illusory
iv) Consideration may be paste, present or future.
v) It must be Lawful vi) It must not be immoral or opposed to public policy.
(i) Consideration must move at the desire of the promisor :
It is the essential that consideration must move at the Desire of the promisor, but not at the instance of a third party. An act done at the Desire of a third person will not constitute a good consideration within the meaning of section 2 (d) of the Indian Contract Act 1872.
(ii) Consideration may move from the promisee or any other person :
A party who wishes to enforce a contract must be able to show that he himself has furnished consideration for the promise of the other party. In English law, consideration must move from promise only. But in Indian law it may move from promisee to any other person.
(iii) Consideration must be real not illusory :
Consideration must be real and possible. It must not be illusory or unsubstantial.
(iv) Consideration may be paste, present or future :
The words used in the definition under section 2(d) of the Indian contract Act, clearly state state that, consideration may be past, present or future.
(v) It must be Lawful :
Consideration must not be illegal it must be Lawful.
(vi) It must not be immoral or opposed to public policy.:
Consideration must not be immoral for opposed to public policy.
1) Meaning of Consideration :
Consideration is necessary for the one formation of a contract. It means "something return". It is the price paid for contract. It must be Lawful.A contract without consideration is void.
Example :
Sale of Car. In a contract for sale of a car is consideration for one party, while the price is consideration for the other party.
2) Definition of Consideration
(a) Pollock :
According to Pollock Consideration is the price for which the promise of the offer is brought, and the promise thus given for value is enforceable.
(b) Blackstone :
According to Blackstone consideration is the recompense given by the party contracting to the other. It is the price of the promise.
(c) Justice Peterson :
According to Justice Peterson consideration means something which is of some value in the eyes of law. It may be some benefit to the plaintiff or some detriment to the defendant.
(e) Denning L. J :
According to Denning L. J, Consideration is cardinal necessity of the formation of contract. Consideration must be something which is of some value in the eyes of law.
Section 2(d) of the Indian Contract Act, 1872 defines consideration -
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;
3) Essential elements of Consideration :
i) Consideration must move at the desire of the promisor
ii) Consideration may move from the promisee or any other person
iii) Consideration must be real not illusory
iv) Consideration may be paste, present or future.
v) It must be Lawful vi) It must not be immoral or opposed to public policy.
(i) Consideration must move at the desire of the promisor :
It is the essential that consideration must move at the Desire of the promisor, but not at the instance of a third party. An act done at the Desire of a third person will not constitute a good consideration within the meaning of section 2 (d) of the Indian Contract Act 1872.
(ii) Consideration may move from the promisee or any other person :
A party who wishes to enforce a contract must be able to show that he himself has furnished consideration for the promise of the other party. In English law, consideration must move from promise only. But in Indian law it may move from promisee to any other person.
(iii) Consideration must be real not illusory :
Consideration must be real and possible. It must not be illusory or unsubstantial.
(iv) Consideration may be paste, present or future :
The words used in the definition under section 2(d) of the Indian contract Act, clearly state state that, consideration may be past, present or future.
(v) It must be Lawful :
Consideration must not be illegal it must be Lawful.
(vi) It must not be immoral or opposed to public policy.:
Consideration must not be immoral for opposed to public policy.
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