consideration

Section 2(d) of the Indian Contract Act defines consideration as an act, abstinence or promise by the promisee or any other person, done or promised at the desire of the promisor. Indian law differs from English law in two ways: consideration may move from a third person, and past consideration (“has done”) is good. It must, however, be at the promisor's desire, not at the instance of a third party.

Consideration need not be adequate, though inadequacy may bear on free consent (s.25, Explanation 2), and it must be lawful (s.23). An agreement without consideration is void under s.25 unless it is a registered writing made out of natural love and affection between near relatives, a promise to compensate a past voluntary act, or a written promise to pay a time-barred debt.

Example

Since the promise was made in return for services the nephew had already rendered at the uncle's request, past consideration supports it under section 2(d).

In Indian law

• Sections 2(d) and 25, Indian Contract Act, 1872
• Durga Prasad v. Baldeo (Allahabad High Court, 1880): act done at the desire of a third person is not consideration
• Chinnaya v. Ramayya (Madras High Court, 1882): consideration may move from a third person

See also

contract · privity of consideration · nudum pactum · agreement

Read more in the study notes

• Classification of administrative action (Administrative Law)
• Control of delegated legislation: parliamentary, procedural and judicial (Administrative Law)
• The rule against bias (Administrative Law)
• Reasoned decisions, exceptions to natural justice, effect of breach and Article 136 (Administrative Law)
• Administrative discretion and its judicial review (Administrative Law)
• Government contracts and state liability: the administrative-law angle (Administrative Law)