Consideration and nudum pactum
Contract I · Unit I · Topic 5 of 24 · 6 min read
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1. Definition: section 2(d)
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 to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. In the classic English phrase from Currie v. Misa (1875), consideration is some right, interest, profit or benefit to one party, or some forbearance, detriment, loss or responsibility suffered by the other. Pollock called it the price for which the promise of the other is bought.
2. Essentials
- At the desire of the promisor. An act done voluntarily, or at the desire of a third person, is not consideration.
- By the promisee or any other person. Consideration may move from a stranger; this is the Indian departure from English law (see the note on privity).
- Past, present or future. “Has done”, “does”, “promises to do”.
- Real, not illusory; it must have some value in the eye of the law, though it need not be adequate.
- Not something the promisee is already bound by law to do, as a public duty or an existing contractual duty owed to the promisor (Stilk v. Myrick, 1809).
- Lawful, s.23.
3. “At the desire of the promisor”: Durga Prasad v. Baldeo
In Durga Prasad v. Baldeo (Allahabad High Court, 1880) the plaintiff, at the order of the Collector, spent money building shops in a market. The defendant, who occupied one of the shops, promised to pay him a commission on articles sold through his agency. The plaintiff sued on the promise. Held, the promise was without consideration and void: the shops had been built at the desire of the Collector, not of the defendant. Contrast Kedarnath Bhattacharji v. Gorie Mahomed (Calcutta High Court, 1886), where a subscriber who had promised money for a town hall was held liable, because on the faith of the subscriptions, and at the subscribers’ request, the commissioners had contracted with builders.
4. Past, present and future consideration
Past: the act was done before the promise, but at the promisor’s desire. Indian law recognises it in s.2(d) (“has done”). English law generally does not (Re McArdle, 1951), except where the act was done at the promisor’s request and payment was understood (Lampleigh v. Brathwait, 1615). Present (executed): the act and the promise are simultaneous, as in a cash sale. Future (executory): a promise in return for a promise, as in most commercial contracts.
5. Adequacy
Consideration must be real but need not be adequate. Explanation 2 to s.25 says an agreement to which the promisor’s consent is freely given is not void merely because the consideration is inadequate, but the inadequacy may be taken into account in deciding whether consent was freely given. Illustration (f): A agrees to sell a horse worth Rs 1,000 for Rs 10; if A’s consent was freely given, the agreement is a contract. Gross inadequacy is a warning sign of fraud or undue influence, nothing more.
6. Exceptions: section 25
An agreement made without consideration is void unless:
- s.25(1) Natural love and affection. It is expressed in writing and registered, and is made on account of natural love and affection between parties standing in a near relation to each other. Illustration (b): A, for natural love and affection, promises to give his son Rs 1,000, in writing and registered; this is a contract. All three elements are needed. In Rajlukhy Dabee v. Bhootnath Mookerjee (Calcutta High Court, 1900) a husband’s registered promise to pay his wife maintenance, made after quarrels, failed because there was no natural love and affection.
- s.25(2) Compensation for past voluntary service. It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something the promisor was legally compellable to do. Illustration (c): A finds B’s purse and gives it to him; B promises A Rs 50; this is a contract. Illustration (d): A supports B’s infant son; B promises to pay A’s expenses; contract.
- s.25(3) Time-barred debt. It is a promise, made in writing and signed by the person to be charged or his agent, to pay wholly or in part a debt which the creditor might have enforced but for the law of limitation. Illustration (e): A owes B Rs 1,000, barred by limitation; A signs a written promise to pay Rs 500; contract.
Explanation 1 adds that s.25 does not affect the validity of a completed gift between donor and donee. Two further statutory exceptions: s.185, no consideration is necessary to create an agency; and s.63, a promisee may remit or accept less than the full performance without fresh consideration (contrast Foakes v. Beer in England). A bailment may also be gratuitous (s.148).
7. Promissory estoppel
Equity sometimes holds a promisor to a promise unsupported by consideration, where the promisee has acted on it to his detriment. In Motilal Padampat Sugar Mills Co. v. State of Uttar Pradesh, 1978 INSC 256, (1979) 2 SCC 409, the State announced that new industrial units would be exempt from sales tax for three years. Relying on that assurance, the company set up a vanaspati plant. The State later went back on it. The Supreme Court held the State bound. Where a party makes a clear promise intending it to be acted on, and the other party acts on it, the promisor cannot resile, even though there is no consideration and no formal contract. The doctrine cannot be used to compel a public authority to act against a statute, and the Government may resile where the public interest requires it, but the burden is on the Government to show that.
8. Problem
A’s house catches fire while he is away. His neighbour B puts out the fire at some risk. On his return A, grateful, orally promises B Rs 10,000. Later he refuses to pay. Can B recover?
Issue. Whether a promise made in return for a past act done without the promisor’s request is enforceable.
Law. Consideration must be given at the desire of the promisor (s.2(d); Durga Prasad v. Baldeo). But s.25(2) saves a promise to compensate a person who has already voluntarily done something for the promisor. That exception requires no writing.
Application. B acted without A’s request, so there is no consideration under s.2(d). However, B voluntarily did something for A, and A afterwards promised to compensate him. This is precisely the situation in illustration (c) to s.25.
Conclusion. The promise is enforceable under s.25(2) and B can recover Rs 10,000.
How this is examined
As an essay: “An agreement without consideration is void. Discuss with exceptions and decided cases” (set in January 2026), or “Define consideration and explain its essentials.” Give the maxim, s.2(d), the essentials with Durga Prasad and Chinnaya, then s.25 with all three exceptions and their illustrations, s.185 and a short paragraph on Motilal Padampat. Short notes: past consideration, adequacy of consideration, promissory estoppel.
Now try the real questions: Contract I past question papers.