Legal Rules Regarding Consideration

Rules Regarding Consideration

1. Subject :Mercantile Laws TOPIC : LEGAL RULES REGARDING CONSIDERATION GROUP MEMBER ID NO : 14BCOM08 BAFNA ANKUR 14BCOM29 PATEL MITUL 14BCOM31 PATEL HEMANSHU

2. Legal Rules Regarding Consideration Consideration must move at the desire of the promissor: an act forming consideration that must be done at the desire or request of the promisor. If it is done unless a person offers to do something how can he be made liable to pay for that? Example : A polished B’s car without any request from B. is B liable? Obviously not, as the polish on B’s car was done without his request.

3. consideration may move from promisee or any other person: the consideration may be given by the promisee or any other person on his behalf. Example: a father gifted the whole of his property to his daughter on the condition that she should pay a certain sum of money annually to her uncle(father’s brother) on the same day, the daughter entered into an agreement with her uncle and agreed to pay the annually. Later on, the daughter refused to pay the amount that the uncle not received any consideration. The court held that the consideration was paid by the father on behalf of her uncle. Therefore, the uncle was entitled to recover the annuity.

4. Consideration may be forbearance: this means that the consideration may be a promise not to file a legal suit against the person. example: A’s scooter is damaged by B negligently driving his car. B promises to pay Rs.1000 as repair charges for the scooter if A does not sue him in a court of law. Here, A’s forbearance to sue B is a good consideration.

5. consideration may be past, present or future: Past consideration: when a consideration by a party for a present promise was given in the past. Example: A found B’s purse and gave it to him . B promised to give A Rs.50 as a reward. Here, for B’s promise, the act of A in finding B’s purse is the past consideration. Present consideration : when the promisor receives consideration simultaneously with the promise, it is present consideration. Example: A purchase goods by paying money in cash here, the consideration is present consideration.

6. Future consideration: when consideration for a promise is rendered in future it is future consideration example: A agreed to sell and deliver certain goods to B after a week at agreed price. B agreed to pay the price after fifteen. days. Here, as the price and the ownership of goods are to be Transferred in future. Therefore the consideration in future For both the parties Consideration need not to be adequate: it is not Necessary that there must be full return for the promise. Example: A agreed to sell his watch worth Rs.100 only for Rs.10 .A’s consent to the agreement was given freely .the Consideration, though inadequate, will not affect the validity Of the contract.

7. Consideration must be real and not illusory: consideration must be real, it has some value in the eye of law . it should not be illusory Example: A promised to pay Rs.500 to B if he brings a star from the sky to earth. Here, consideration for A’s promise to pay Rs. 500 to B is “to bring a star from the sky”. The contract is void as the consideration is illusory. This promise is also physically impossible to perform.

8. It must be something which the promisor is not already bound to do: means preexisting legal and contractual obligations cannot be regarded as good consideration Example: A promised to pay Rs. 1000 extra to a lawyer for winning the suit. A is not bound to pay Rs.1000 even if he wins the case . payment of one thousand rupees extra in this case is not a good consideration because the lawyer was legally bound to do. Consideration must not be illegal , immoral ,or opposed to public policy: means the consideration must be lawful Example: A promised to pay Rs. 500 to B if he beats C. the agreement is void as the consideration involves an injury to C, which is unlawful.

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