Explain Consideration with examples

1.     Consideration must move at the desire of the promisor. In order to constitute legal consideration the act or
abstinance forming the consideration for the promise must be done at the desire or request of the promi-sor. Thus acts done or services rendered voluntarily, or at the desire of the third party, will not amount to valid consideration so as to support a contract. The logic for this may be found in the worry and expense to which every one might be subjected, if he were obliged to pay for services, which he does not need or require.

We shall study some more examples to make this concept clearer

Illustrations

(a)            A sees B’s house on fire and helps in extinguishing it. He cannot demand payment for his services because B never asked him to come for help.

(b)     D had built, at his own expense, a market at the request of the Collector of the District. The shopkeepers in the market promised to pay D a commission on the articles sold by them in the market. When D sued the shopkeepers for the commission, it was held that the promise to pay commission did not amount to a contract for want of consideration, because D (the promisee) had constructed the market not at the desire of the shopkeepers (the promisors) but at the desire of the Collector to please him (Durga Prasad vs Baldeo)

It must be noted that this essential does not require that the consideration must confer ‘some benefit’ on the promisor. It would be enough if the act or forbearance or promise constitut­ing the consideration was done or given at the promisor’s request, the benefit may accrue to a third party. We call this concept Privity of Consideration

For Example

(a)            B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of the price of the goods. C promises to guarantee the payment. The contract between A and C is a ‘contract of guarantee’ and is perfectly valid though the benefit which A confers in return of C’s guarantee is conferred not on C but on B (in the shape of sale of goods on credit). A’s promise to deliver the goods is the consideration for C’s promise of guarantee. (Illustration appended to Section 127).

(b)     A, who owed Rs 20,000 to B, persuaded C to pass a promissory note for the amount in favour of B. C promised B that he would pay the amount (by passing on a promissory note), and B credited the amount to A’s Account in his books. The discharge of A’s Account was consideration for C’s promise (though C the promisor had received no benefit) (National Bank afUpper India vs Bansidhar).

Capacity to Contract: Persons Disqualified to enter into a Contract   Explain Consideration with examples  Types of Consideration  No Consideration, No Contract

What is Consideration?  Stranger to a Contract cannot sue

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