Data Structure
Networking
RDBMS
Operating System
Java
MS Excel
iOS
HTML
CSS
Android
Python
C Programming
C++
C#
MongoDB
MySQL
Javascript
PHP
Physics
Chemistry
Biology
Mathematics
English
Economics
Psychology
Social Studies
Fashion Studies
Legal Studies
- Selected Reading
- UPSC IAS Exams Notes
- Developer's Best Practices
- Questions and Answers
- Effective Resume Writing
- HR Interview Questions
- Computer Glossary
- Who is Who
What are the Essentials of a Valid Consideration?
Consideration constitutes the substance and objective of the contract; therefore, it is essential for its validity. Moreover, under the Indian Contract Act, 1872, a contract without consideration is void, subject to certain definite exceptions. The amount of significance that is attached to consideration is due to the determinative nature of amplification used in concluding the authenticity and lawfulness of a contract under conflicting circumstances.
What is the Meaning of Consideration?
Consideration is the reason or reward for making the contract, which forms its part. It means that when a person makes a promise, which usually is the offer, he gets something in return for the promise, which is known as consideration. Section 2(d) of the Contract Act defines consideration as −
“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 an act, abstinence, or promise is called a consideration for the promise.”
Thus, consideration is given to the promisee at the desire of the promisor in return for the promise, and it includes either an act to do something or an omission to do something, either by the promisee himself or by someone else. Hence, consideration can be given either by the promisee or by someone else as well.
Types of Considerations
The following are the types of considerations −
Past Consideration − Past consideration is the act that was done prior to the formation of the promise but at the desire of the promisor. Thus, it’s a consideration for a subsequent promise.
Present Consideration − The present consideration is the executed consideration because it is already performed and only the promise is left to be performed as part of the contract.
Future Consideration − future consideration is the executory consideration, as it requires to be performed in the future at the desire of the promisor.
Essentials of Consideration to Make It Valid
The following are the essentials of a valid consideration −
Desire of the Promisor − Consideration is required to be given at the desire of the Promisor as it is a mandate of the law. It cannot be given at the desire of the promisee or a third party, as the offer was made by the promissor.
Can be Given by Anyone − Consideration can be given either by the promissor or by anyone else except the promisee himself. This is an exception to the legal principle of privity of contract and practice of law prevalent in India, as usually a person who is not a party to the contract cannot enforce the contract.
Subsistence of Consideration − Consideration can either be in the past, present, or future; however, its existence must be capable of contemplation in reality. It is exemplified by the definition as well, which says past actions or future actions can also be considered if they were done or intended to be done at the desire of the promisor.
Real and Substantial − A consideration must be something real and substantial; it means that something must be done in return for the promise, as if nothing is done, that implies no consideration, and the entire contract stands void.
Inadequacy − A consideration is not required to be adequate or valuable, as it is the existence of a consideration and not its value or significance that is determinative of the validity of an enforceable contract.
Lawful − Consideration must be lawful because an unlawful or illegal consideration cannot form part of a contract.
Conclusion
A consideration shows the existence of a contract because it reflects the intention of the parties to create a legal relationship in order to attain its purpose. Thus, a consideration must be lawful and substantive in order to denote the validity of the contract. Likewise, the inadequacy of a contract might not affect its legal validity, but it’s a relevant factor in deciding the intention of parties to the contract.
Frequently Asked Questions
Can a consideration becoming illegal subsequent to the formation of a contract make it void?
A consideration that was legal at the time of contract formation but becomes illegal or unlawful afterwards makes the contract voidable and not void ab initio.
What can be considered in a contract?
Anything that is real and substantive can form a consideration for a contract, for instance, a gift, money, kindness, a promise to do something or to abstain from doing something, etc. However, a duty and ideas cannot form a consideration.
112 Views
