Tuesday, 4 September 2012


Agreements enforceable by law are contracts.
The Contract Law is mostly Commonsense
Points for discussion as based on The Indian Contract Act 1872

Consideration is the benefit accruing to the parties to a contract.

Consideration can be ‘right, interest, profit or benefit’ for one party. It can also be ‘some forbearance, detriment, loss or responsibility given, suffered or undertaken’ by the other.

Agreements without consideration are not enforceable.

Consideration does not have to be commensurate or sufficient.

Consideration must move at the desire of the promisor
Durga Prasad v Baldeo (1880)
– Case involving improvements to the market .

Consideration may move from the promisee or any other person
Chinnaya v Ramayya (1882)
- Case involving an old lady, her daughter & her sister

It must have some value in the eyes of law.

It must be real not illusory.
Stilk v Myrick (1809)
- Case involving salary of crew who deserted the ship

It must be something which one is not already bound to do.
Ramachandra Chintaman v Kalu Raju (1877)
- Case involving promise to pay to the Vakil an additional sum if the suit was successful

Nude Contracts
An agreement made without consideration is void

  • Love and affection. (A written and registered agreement based on natural love and affection between near relatives.)
  • Compensation for past voluntary services.
  • Promise to pay a time barred debt.
  • Completed gift. (Transfer of property by one person to another as a gift according to the provisions of Transfer of Property Act.)
  • Contract of agency does not require consideration.
  • Consideration is not required for remission of debt.
  • A contract of guarantee is made without consideration.

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