What is a valid consideration?
Consideration is some thing of value promised by one party to another while entering into a contract. For a consideration to be valid there must be a promise from both sides. This means that there must be a promise by one party against the promise of the other party.
What is consideration and its rules?
“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 abstain from doing something, such act or abstinence or promise is called a consideration for the promise.” …
What are the exceptions to consideration?
The exception to the rule of consideration squarely falls within the purview of the statute. Indian Contract Act in section 25, categorically provides for the three situations whereby the requirement of consideration ends. It is natural to love, affection, voluntary service and payment of the time-barred debt.
What are the features of consideration?
The court in the case of Currie v Misa defined consideration as a right, interest, profit, detriment, loss, or responsibility. Its main characteristic is that the promissor must give a promise of something that is of value, and the promisee must give something of value in exchange.
Why is consideration needed?
When forming a contract, consideration is needed in order to make the agreement a formal, valid contract. Consideration is needed so that both parties incur some sort of burden or obligation in the agreement. Without consideration, the exchange would likely be classified as a gift.
What does without consideration mean?
Without consideration, a contract cannot be enforced or is otherwise voidable (with only a very few exceptions). The exchange of value is interpreted broadly to not only include money, but property, a promise, doing something, or even not doing something.
What’s another word for consideration?
SYNONYMS FOR consideration 1 reflection, contemplation, rumination, attention. 3 kindness, kindliness, concern. 5 remuneration, fee. 6 weight, significance, moment.
Does consideration have to be money?
First, consideration does not have to be money. It can be something of value, so it can be another object or a service.
How far is it true an agreement without consideration is void?
A contract without consideration is void because it is not legally enforceable. “Consideration” means that each party must provide something of value to the other party as designated by the contract terms.
Can you have an agreement without consideration?
Without consideration, there is no exchange of promises, and no ‘payment’ for the good received. If you sign a contract which does not have consideration, it is likely that it will not be enforced by the Court.
What will happen if consideration is missing in an agreement?
When a Contract Lacks Consideration The court may, at times, declare that a contract lacks consideration for one or more of the parties involved, rendering it unenforceable. A contract may lack consideration if any of the following is true: The promise cannot legally (or practically) be offered.
Is a Promise good consideration?
The performance of an existing contractual duty owed to the promisor is not good consideration for a fresh promise given by the promisor. However, performance of an existing contractual duty owed to a third party can be good consideration, see further below.