What is Consideration?

Consideration is one of the essential elements of a valid contract (Sec. 10). The fact. of its existence serves to distinguish those promises by which the promisor intends to be legally bound from those which are not” seriously meant.

In the words of Blackstone: “A consideration of some sort or other is so necessary to the forming of a contract, that a nudum pactum, or agreement to do or pay something on one side, without any compensation on the other, will not at law support an action; and a man cannot be compelled to perform it. The law supplies no means nor affords any remedy to compel the performance of an agreement made without consideration. If I promise a man £ 100 for nothing, he neither doing nor promising anything in return or to compensate me for my money, my promise has no force in law.”

Anson said that the offer and acceptance bring the parties together and constitute the outward semblance of a contract but most systems of law require some further evidence of the intention of the parties, which is provided by consideration and form. It may be noted that consideration is a cardinal necessity for the formation of a contract., but no consideration is necessary for the discharge or modification of a contract.

The breach of a gratuitous promise cannot be redressed by legal remedies. It is only when a promise is made in return of ‘something’ from the promisee, that such promise can be enforced by law against the promisor. This ‘something’ in return is the consideration for the promise. In the language of purchase and sale Pollock has observed: “Consideration is the price for which the promise of the other is bought”. Anson said that an offer and acceptance bring the parties together and constitute the outward semblance of a contract.

Definition

Section 2(d) of the Indian Contract Act defines consideration as follows“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. "

An analysis of the above definition will show that it consists of the following four components:

(a) The act or abstinence or promise which forms the consideration for the promise, must be done at the desire of the promisor:

(b) It must be done by the promisee or any other person

(d) Tt must be something to which the law attaches a value.

The concept of consideration will become more clear to you after reading these illustrations.

Illustrations

(i) A agrees to sell his house to B for Rs 10,000. Here B’s promise to pay the sum of Rs10,000 is the consideration for A’s promise to sell the house, and A’s promise to sell the house is the consideration for B’s promise to pay the sum of Rs10,000.

(ii) A promises to maintain B’s child and B promises to pay A Rs 1,000 yearly for the purpose. Here the promise of each party is the consideration for the promise of the other party.

(iii) A promises to pay B Rs 1,000 at the end of six months, if C, who owes that sum to B, fails to pay it. B promises to grant time to C accordingly. Here the promise of each party is the consideration for the promise of the other party.

(iv) A promises his debtor B not to file a suit against him for one year on B’s agreeing to pay him Rs.100 more. The abstinence of A is the consideration for B’s promise to pay.

(v) A promises to type the manuscript ‘of B’s book, and in return B promises to teach A’s son for a month. The promise to each party is the consideration for the promise of the other party.

(vi) A person had a. daughter to marry and in order to raise funds for her marriage he intended to sell a property. His son promised that if the father would forbear to sell, he would pay the father Rs. 50,000. The father accordingly forbore. The abstinence of the father is the consideration for son’s promise to pay. -