Section 25 of the Contract Act, 1872.pptx By Judge Nazmul Hasan.

In this presentation Section 25 of the Contract Act, 1872 has been discussed with suitable illustration.

1. Section 25 of the Contract Act, 1872 P repared by-Nazmul Hasan, senior judicial Magistrate at bjs.

2. Section 25 of the Contract Act, 1872. Consideration; Definition, types of consideration; Section 25 of the Contract Act, 1872; “No consideration no contract” doctrine; exception to this rule; Problematic questions and solutions; Previous questions and answers; Probable questions and answers; Preparation before examination; Last time revision; Conclusion.

3. Section 25 of the Contract Act, 1872 continue… Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law 25. An agreement made without consideration is void, unless– (1) it is expressed in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do, or unless (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract.

4. Section 25 of the Contract Act, 1872 continue… Explanation 1 – Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made . Explanation 2 – An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given .

5. Section 25 of the Contract Act, 1872 continue… Illustrations (a) A promises, for no consideration, to give to B Taka 1,000. This is a void agreement. (b) A, for natural love and affection, promises to give his son, B, Taka 1,000. A puts his promise to B into writing and registers it. This is a contract. (c) A finds B's purse and gives it to him. B promises to give A Taka 50. This is a contract. (d) A supports B's infant son. B promises to pay A's expenses in so doing. This is a contract.

6. Section 25 of the Contract Act, 1872 continue… (e) A owes B Taka 1,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B Taka 500 on account of the debt. This is a contract. (f) A agrees to sell a horse worth Taka 1,000 for Taka 10. A's consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration. ( g) A agrees to sell a horse worth Taka 1,000 for Taka 10. A denies that his consent to the agreement was freely given. The inadequacy of the consideration is a fact which the Court should take into account in considering whether or not A's consent was freely given.

7. Section 25 of the Contract Act, 1872 continue… Question. 1. ‘A’ promises for no consideration, to give to ‘B’ Tk. 10,000. Can ‘B’ claim the promised amount from ‘A’? Give reasons and also refer relevant provision on point . Question. 2. ‘A’ for natural love and affection, promises to give his son ‘B’ Tk. 10,000. ‘A’ puts his promise to ‘B’ into writing and registers it. Can ‘B’ claim the promised amount from ‘A’? Question. 3. Being fed up with each others quarrelling nature, both husband and wife entered into an agreement in which wife agree to live separately from her husband permanently and husband agrees to pay her a monthly maintenance allowance of Tk. 1000. After six months husband refuses to pay the allowance. Can wife enforce the agreement against her husband in a court of law?

8. Section 25 of the Contract Act, 1872 continue… Question. 4. ‘A’ finds B’s purse and gives it to him. ‘B’ promises to give ‘A’ Tk. 1,000. Can ‘A’ claim the money? Give reasons and also refer relevant provision . Question. 5. ‘A’ supports B’s infant son ‘C’. B promises to pay A’s expenses in so doing. But subsequently ‘B’ refuses to pay promised expenses to ‘A’. ‘A’ sues ‘B’ for the promised amount. ‘B’ pleads that ‘A’ voluntarily supported ‘C’ and there is no consideration on part of ‘A’ for his promise. Will ‘B’ succeed in this case? Give reasons and also refer relevant provision on the point.

9. Section 25 of the Contract Act, 1872 continue… Question. 1. ‘A’ promises for no consideration, to give to ‘B’ Tk. 10,000. Can ‘B’ claim the promised amount from ‘A’? Give reasons and also refer relevant provision on point. Answer: No , ‘B’ cannot claim the promised amount of Tk. 10,000 from ‘A’-Section 25 (An agreement without consideration, void). Reasons: This problem is based on Section 25 of the Contract Act, 1872. The relevant part of Section 25 on which this problem is based speaks that an agreement made without consideration is void. The principle laid in Section 25 is "No consideration, no contract". In this problem consideration (Tk. 10,000) is moving from ‘A’ but no consideration either in the form of money or in the form of services, moving on part of ‘B’. Thus, this agreement is void in view of the relevant provision made in Section 25, and ‘B’ cannot claim the promised amount from ‘A’. Note: Facts of this problem have been taken from Illustration (a) of Section 25.

10. Section 25 of the Contract Act, 1872 continue… Question. 2. ‘A’ for natural love and affection, promises to give his son ‘B’ Tk. 10,000. ‘A’ puts his promise to ‘B’ into writing and registers it. Can ‘B’ claim the promised amount from ‘A’? Answer: Yes, 'B' can claim promised amount from 'A'-Section 25(1) of the Contract Act, 1872 . Reasons: Section 25 of the Contract Act, 1872 speaks an agreement without consideration is void. The rule is based on the principle "No consideration, no contract". But the aforesaid general rule is subject to three exceptions given in Section 25. This problem is based on Section 25 of the Contract Act, 1872 which embodies one of the exceptions of general rule that 'No consideration, No contract’. According to Section 25(1) of the Contract Act, 1872 an agreement without consideration is valid if it is a promise made out of love and affection to a person standing in near relationship provided the promise is in writing and registered.

11. Continue Question 02… In the given problem the promise has been made by ‘A’ to his son ‘B’ who stands in near relationship with ‘A’. The promise has been made out of love and affection and it is in writing and registered also. Thus, we find that all the conditions given in Section 25(1) of the Contract Act, 1872 are satisfied. Hence, ‘B’ can claim promised amount Tk. 10,000 from ‘A’ in view of the provisions made in Section 25(1) of the Contract Act, 1872 even though there is no consideration moving from ‘B’ for Tk. 10,000. Note: Facts of this problem have been taken from Illustration (b) of Section 25.

12. Section 25 of the Contract Act, 1872 continue… Question. 3. Being fed up with each others quarrelling nature, both husband and wife entered into an agreement in which wife agree to live separately from her husband permanently and husband agrees to pay her a monthly maintenance allowance of Tk. 1000. After six months husband refuses to pay the allowance. Can wife enforce the agreement against her husband in a court of law? Answer: No, wife cannot get the agreement enforced against her husband in a court of law Rajlukhy Dabee v. Bhootnath Mukherjee, (1900) 4 Cal WN 488. Reasons: Facts of this case is similar to the case of Rajlukhy Dabee v. Bhootnath Mukherjee referred above. In this case husband promised to pay his wife a fixed amount every month for her separate residence and maintenance. The agreement was contained in a registered document which mentioned certain quarrels between them. In this case Calcutta High Court held that the case of wife is not covered by Exception 1 of Section 25 because this exception comes into play only when promise is made out of love and affection. In the given problem promise is made by husband because of quarrel between them and not out of love and affection. Hence, the wife cannot get the agreement enforced against her husband under Section 25(1) of Indian Contract Act.

13. Section 25 of the Contract Act, 1872 continue… Question. 4. ‘A’ finds B’s purse and gives it to him. ‘B’ promises to give ‘A’ Tk. 1,000. Can ‘A’ claim the money? Give reasons and also refer relevant provision. Answer: Yes, ‘A’ can claim the money promised by ‘B’-Section 25(2) of the Contract Act, 1872. Reasons: According to Section 25 of the Contract Act, 1872 an agreement without consideration is void. But it is notable that aforesaid general rule provided by Section 25 is subject to three exceptions mentioned in Section 25 itself: This problem is based on Section 25(2) which lays down one of the exceptions to the general rule “No consideration, No contract”. The relevant part of Section 25(2) on which this problem is based provides that an agreement is not void if it is a promise to compensate (wholly or in part) a person who has already done something for the promisor. In this case ‘A’ after finding the purse of ‘B’ gives it to him. Thus, ‘A’ has voluntarily done something for the promisor (B). Consequently ‘B’ promises to compensate ‘A’ to give Tk. 1,000 to him. Thus, promise by ‘B’ to ‘A’ to give Tk. 1,000 is a valid agreement in view of the provisions made in Section 25(2) even though there is no consideration moving from ‘A’ for Tk. 1,000. Note: It is notable that in this problem act of ‘A’ of giving purse to ‘B’ after finding it is no consideration on part of ‘A’ because it was done voluntarily by ‘A’ and not at the desire of ‘B’ (promisor). When something is done by a person voluntarily, it does not come within the definition of ‘Consideration’ given in Section 2(d) because the relevant part of Section 2(d) speaks “When at the desire of promisor”.

14. Section 25 of the Contract Act, 1872 continue… Question. 5. ‘A’ supports B’s infant son ‘C’. B promises to pay A’s expenses in so doing. But subsequently ‘B’ refuses to pay promised expenses to ‘A’. ‘A’ sues ‘B’ for the promised amount. ‘B’ pleads that ‘A’ voluntarily supported ‘C’ and there is no consideration on part of ‘A’ for his promise. Will ‘B’ succeed in this case? Give reasons and also refer relevant provision on the point. Answer : No, ‘B’ will not succeed in this case-Section 25(2) of the Contract Act, 1872. Reasons : According to Section 25 of the Contract Act, 1872 an agreement without consideration is void. But this general rule is subject to three exceptions given in Section 25 itself. Section 25(2) which is one of the exceptions to aforesaid general rule provides that an agreement without consideration is not void if it is a promise to compensate (wholly or in part) a person who has already voluntarily done something for the promisor or something which the promisor was legally compellable to do. In the instant problem ‘B’ was legally compellable to support his infant son ‘C’. Thus, the case falls within the ambit of Section 25(2) of the Contract and ‘B’ is liable to make payment of expenses incurred by ‘A’ in supporting B’s infant son although there is no consideration moving on part of ‘A’ at the time when promise was made by ‘B’ to ‘A’. 'B' will not succeed in this case. Note: See Illustration (d) attached to Section 25.

15. Prepared by-Nazmul Hasan, Senior Judicial Magistrate at Bangladesh Judicial Service.