Consideration

presentation on consideration

1. PRESENTATION ON CONSIDERATION Submitted to : Ms. Neetu Submitted By : Tanvi MBA 1 ST SEM GBS 1095

2. CONTRACT According to Section 2(n) of Indian Contract Act 1872, “An Agreement enforceable by law is a Contract.” Thus, contract must have following elements: An agreement Its enforceability at law

3. CONSIDERATION Consideration meaning “Something In Return” which have some value in the eyes of law. i.e. QUID-PRO-QUO This ‘Something’ may be a Right, Interest, profit or some benefits accrue to one party. It is the Price of Promise.

4. Definition…. According to Pollock, “Consideration is the price for which the promise of other is bought and promise thus given for value is enforceable.”

5. Example…….

6. Essentials of Valid Consideration It must move at the desire of the promisor It must move from promisee or any other person. It must be Past, Present or Future. It must not be Adequate. It must be Real. It must be Lawful. It must be something which the promisor is not already bound to Do.

7. It must move at the desire of the promisor:- Consideration must have been done at the desire or request of the promisor. Example: A’s Horse is lost B goes in search for him. Can B claims remuneration from A? Case Reason/Decision If B does this act voluntarily b) If B does this act at the request of A c) If B does this act at the request of C

8. CASE DURGA PRASAD VS. BALDEO(1880) On the request of the collector of a town. A built certain shops in the bazaar at his own expenses. These shops were occupied by B. As , A spent money in construction, B promised to pay some money to A. thus A sued B to recover the money as promised

9. 2) It must move from P romisee or any other person UNDER ENGLISH LAW: it must move from promisee . UNDER INDIAN LAW: It may move from promisee or any other person Example :-

10. Case study CHINNAYYA Vs RAMAYYA (1882) An old lady made a gift of her property to her daughter, with a direction to pay a certain sum of money to the maternal uncle annually. On the same day, daughter executed a deed in writing in favour of her maternal uncle to pay the annuity, later on daughter refused on the ground that no consideration had moved from uncle.

11. 3) It may be Past, Present, or Future Past consideration: Present consideration

12. Future consideration: The consideration which is to be moved after the formation of agreement. Example: A agrees to paint Y’s picture for Rs . 500 when picture will be completed Y will pay Rs . 500

13. 4) It must be real, not illusory

14. 5) It must not be Adequate.. Something in return means need not necessarily equal to something given. Example : A was in need of money he sells his scooter worth Rs . 40,000 for Rs . 8,000 only.

15. 6) It must be a Lawful consideration Consideration for an agreement must not be illegal, forbidden by law, or opposed to publc policy.

16. 7 ) It must be something which the promisor is not already bound to do: Collins Vs Godfrey (1834) Case : A promised to pay money to a police officer to investigate into a crime. J ustification : The officer is already under a duty to do so by law

17. No Consideration No Contract EXCEPTIONS 1 ) Gifts 2 ) Contribution to charity 3)Natural Love and Affection (Sec, 25(1)): It is valid if: It is expressed in writing. It is registered under law Made on natural account of love Example: A, for love and affection promises to give his son Rs 3000. A put his promise in writing. The promise is binding on A and it is valid contract without consideration.

18. 4 )Compensation for services rendered (Sec. 25(2)):- It is valid if following conditions are satisfied: The service ,must have been rendered voluntarily. The promisor must be in existence at the time when services were rendered The services rendered should not be immoral The promisor must agree now to compensate the promisee .

19. Example…. A find’s B’s purse and gives it to him . B promises to give A Rs . 50 . This is valid contract

20. Difference between.. INDIAN LAW ENGLISH LAW Consideration may move from promisee or any other person . Consideration must move from the promisee . Stranger to consideration can sue Stranger to consideration cannot sue Consideration may be past present or future Consideration can be present or future Natural love and affection is considered to be a good consideration and may support contract It only means something of some value in the eyes of law moving from the promisor. Love and affection is not sufficient.

21. THANK YOU