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Consideration & Object

Consideration

Sec. 2 (d) defines consideration as “When at

the desire of the promisor , the promise or

another person has done or abstained from

doing, or does or abstains from doing, or

promises to do or abstain from doing

something, such an act or abstinence or

promise is called a consideration for the

promise”.

Exceptions to Consideration

1. Natural Love and Affection

2. Voluntary Compensation

3. Agreement to Pay a Time-barred Debt

4. Completed Gift

5. Contracts of Agency

6. Remission by the Promisee

Agreements Made on Account of

Natural Love and Affection

Agreements made on account of natural love and affection between the parties standing in near relationship to each other is valid even without consideration if the following conditions are satisfied: The contract is in writing. The contract is registered.

The contract is made on account of natural love and affection. There must be near relationship between the parties to the contract.

Agreements to Pay a Time-barred

Debt

An agreement made in writing and signed by

the debtor to pay wholly or part of time-

barred debt is valid even if it is not supported

by consideration.

Completed Gift

Any gift given will be valid between the donor

and the done even without consideration.

Contracts of Agency

In case an agent promises to perform an act for the principal with out charging any commission, the agreement is valid even without consideration (Sec. 85).

Remission by the promise

When the promise agrees to receive less than what is due to be paid to him, no consideration is required. If the creditor agrees to give up part of claim, there is no need of consideration. Similarly, an agreement to extend time of performance of a contract, there is no need of consideration.

Stranger to Contract

A stranger to the contract can not sue upon the contract because he has no Privity of contract. This rule is subject to the following exceptions:

1. In case of Trust, the beneficiary can sue to

enforce his rights.

2. Agreements Relating to Immovable Property
3. Family settlements
4. Agent
5. Assignment

Unlawful Considerations and Objects

• Those forbidden by law
• Those which defeat the provisions of law
• Those that are fraudulent
• Those involving injury to persons or property
• Those that are regarded by the courts as immoral

An agreement which leads to corruption, injustice or immorality are considered by the courts as against public policy