Concept of Consideration

Definition of ConsiderationThe word Consideration is defined under [Sec-2(d)] When, at the desire of the Promisor the promisee or any other person on his / her behalf - has done or abstained from doing [Past] or - does or abstains from doing [Present] or - promises to do or abstain from doing [Future] something - such - act or - abstinence or - promise is called a - consideration for the promise. 1Analysis of the Definition of Consideration. Consideration must move - at the desire of the Promisor; - from the promisee, or any other person on his/her behalf.It may be - past, - present or - future.It may consist of an - act, - abstinence or - promise.

Consideration is an important element of an agreement. Note: Agreement made with out consideration is void [Sec-25].It is quid pro quo - which means what for what. It implies exchange of - something in return - which has some material value. It may be Money, Goods or Services.It is the price for which the promise of the other is bought. A valuable Consideration in the sense of Law may consist- some right, interest, profit or benefit accruing to one, or - some forbearance, detriment, loss or responsibility - given, suffered, or undertaken by the other.Consideration need not be adequate.It must be real, lawful not illusory .

Exceptions to the Rule Under Sec- 25 .Some Agreements are valid even though they are not supported by Consideration. They are: made on account of natural love and affection;Containing a promise to compensate another for past voluntary services;Containing a promise to pay a time-barred debt;No Consideration for a - completed gift;No consideration - for creating an agency;No consideration is required for a Surety;Collateral Contract does not form part of Consideration promised, but it is valid Contingent Contract.

STRANGERSA stranger may be a stranger to the contract, or a stranger to the Consideration.Stranger to Contract: A agrees with B for a sum of Rs.1 lac, to do some service to C. C is stranger to the Contract. The parties to the contract are only A and B. A person who is not a party to the contract is the stranger. Such a party neither makes nor accepts an offer. However, his name was referred in the contract.

STRANGERSStranger to Consideration: A promises to give Rs. 1 Lac to C - in consideration of B doing some services for A. The parties to the contract are only A and B. C is stranger to the Consideration. Consideration is furnished by B on behalf of C.

C has not furnished any consideration for the promise made to him by A. The consideration on behalf of Promisee, i.e. C has been supplied by a third party B.

Result:Stranger to Contract cannot sue on a Contract.Stranger to Consideration may sue on the Contract.

Privity of contract. Discuss case law.