Essentials of valid consideration
📜 Essentials of Valid Consideration
1. What is Consideration?
Consideration means something in return for a promise.
Under Section 2(d) of the Indian Contract Act,
“When, at the desire of the promisor, the promisee or any other person does or abstains from doing, or promises to do or abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.”
2. Essentials of Valid Consideration
🔹 a) Consideration Must Move at the Desire of the Promisor
The act or promise that forms the consideration must be done at the request of the person who makes the promise.
Example: If A promises to pay B after B mows A’s lawn on A’s request, mowing the lawn is consideration.
Case: Chinnaya vs. Ramayya (1882)
Held that consideration must move at the desire of the promisor.
🔹 b) Consideration May Move from the Promisee or Any Other Person
The person who does or promises to do the act need not be the promisee.
Example: A promises to pay B for services done by C at A’s request. C’s service is valid consideration, although C is not a party.
Case: Tweddle v. Atkinson (1861) (English case, but followed in India)
Only parties to a contract can sue, but consideration may move from a third party.
🔹 c) Consideration Must Be Real and Not Illusory
Consideration must be something of value in the eyes of law.
It should not be vague, impossible, or false.
Example: Promise to pay “if I like” is illusory and not valid consideration.
🔹 d) Consideration Must Be Lawful
It must not be forbidden by law, fraudulent, or opposed to public policy.
Case: Ferry v. Fisher
Consideration for an illegal act is not valid.
🔹 e) Consideration Must Not Be Past
Consideration should move at the time of or after the promise is made.
Past consideration is generally not valid.
Exception: If the past act was done at the promisor’s request and both parties understood payment would be made later, it may be valid.
Case: Pope v. Thomas (English case illustrating past consideration invalidity).
🔹 f) Consideration Need Not Be Adequate
The law does not require the consideration to be equal in value to the promise.
It must be something of some value but need not be equivalent.
Case: Chinnaya vs. Ramayya
Consideration need not be adequate but must be real.
3. Summary Table
| Essential | Explanation | Example/Case |
|---|---|---|
| Desire of Promisor | Must be done at promisor’s request | Chinnaya vs. Ramayya |
| May Move from 3rd Person | Can be from promisee or others | Tweddle v. Atkinson |
| Real & Not Illusory | Must be genuine | Promise “if I like” is invalid |
| Lawful | Must not be illegal or fraudulent | Ferry v. Fisher |
| Not Past | Should not be before promise | Pope v. Thomas (past cons.) |
| Need Not Be Adequate | No need for equal value | Chinnaya vs. Ramayya |
4. Extra Point: Exceptions to Past Consideration Rule
If a past act was done at promisor’s request with understanding of future payment, it can be valid.
Case: Lampleigh v Braithwaite (English)
Past consideration valid if done at promisor’s request.
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