Consideration is a term used in the sense of quid pro quo i.e., ‘something in return’. Subject to certain exceptions, an agreement made without consideration is null and void. It is a nude agreement (nudem pactum). The promise many give value upon the delivery of the promise or execution of the act by the promisor.
Definition: As per Sec.2(d) of the Act, Consideration is defined 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 abstain from doing something, such act or abstinence or promise is call as consideration for promise.”
Example: A promises to maintain B’s child, and B promises to pay A Rs.1000 yearly for the purpose. Here, the promise of each party is the consideration for the promise of the other party.
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Essential elements of a consideration:
1. Consideration must move at the desire of the promisor: Consideration must be offered by the promise or the third party at the desire or request of the promisor
2. Consideration may move from the promise or any other person: In India, consideration may proceed from the promise or any other person who is not a party to the contract.
3. Executed and executor consideration: A consideration which consists in the performance of an act is said to be executed. When it consists in a promise, it is said to be executor.
4. Consideration need not be adequate: Consideration need not be of any particular value. It need not be approximately of equal value with the promise for which it is exchanged but it must be something which the law would regard as having some value.
5. Consideration should be real and competent: Consideration must be real and must also be competent. It must be something to which the law attaches some value.
6. Consideration must be lawful:
a) It is forbidden (Prohibited) by law
b) It is of such a nature that if allowed it would defeat some other law of the Country
c) It is fraudulent
d) It involves injury to the person or property of the other