What is consideration? Explain its exceptions.
Introduction
The meaning of consideration in the legal sense is “ something in return”. Simply it can be said that exchange of something against another thing. Contract without consideration is not enforceable by the law as well as consideration can be ,in the form of money, in form of other things or to do something or not to do something , consideration has multiple natures. An agreement without consideration is void and consideration should be good and valuable. Consideration is the backbone of the contract it means without it contract cannot create it is vital element in the law of contract
Definition of consideration
Consideration is a such benefit which becomes the reason for creation of contract between the parties. Consideration is an object which can be in form of money, in form of to do something or not to do something or even other than these
Example
A agrees to sell his car to B for Rs. 3 lakh. Now B promises to pay such amount to A, this amount is consideration in this contract or agreement
Types of consideration
Following are the three types of consideration
Past consideration
When consideration is given even before the creation of a contract. It is consideration that is already given is called past consideration
Present consideration
If the consideration is given at the time of creation of contract, it is called present consideration
Future consideration
It the consideration is given after the creation of contract, it is called future consideration
Essentials of consideration
Following are the essentials of consideration
- Consideration should be given by the promisee
- Consideration should be given by the desire of promisor
- Consideration should be lawful
- Consideration should be real
- Consideration may be, past, present, or future
- It may be consisted of an act or money or other than these
Exceptions
It is a fact that without consideration an agreement cannot be created but it has following exceptions
Love and affection
If an agreement has been created between the parties for natural love and affection, in such case consideration is not necessary
Contract of agency
In the contract act of 1872, it has been mentioned that there is no consideration is required for contract of agency
Voluntary services
A contract made without consideration is also valid if there is a promise to compensate, in such case there is no consideration is required
Time barred debt
Money a person borrowed and didn't repay but is not legally collectable because too many years have passed. In such case there is no consideration is required
Contract under seal
Under the English law, a contract which is made in form of a deed under seal is valid even it is made without consideration
Extension in time limit
If agreement is made for extension in time limit for enforcement of the contract, in such case, there is no need of any consideration
Unlawful consideration
If in a contract any object which violates the law or based upon a fraud or creates an injury to others it will be considered unlawful consideration
Cases of unlawful consideration
Following are the cases of unlawful consideration which are being given below
Prohibited by law
If the object of an agreement is prohibited by the law, in this case the consideration will be unlawful
Element of fraud
If the object of an agreement has element of fraud, in this case the consideration will be unlawful
Immoral
If the object of an agreement is immoral in nature, in this case the consideration will be unlawful
Against public policy
If the object of an agreement is against the public policy, in this case the consideration will be unlawful
Injury to other person or property
If the object of an agreement which become cause of an injury to other person or property, in this case the consideration will be unlawful
Unlawful object
If the object of an agreement is itself unlawful, in this case the consideration will be unlawful
Conclusion
It said that the consideration is the one of the most important essentials of the valid contract. Without consideration there is no contract but there are certain exceptions according to them a contract can be valid without the consideration. Consideration removes the fear from the mind of other persons who think that there is a chance of losing a deal. Consider an object which can be in the form of money, in the form of to do something or not to do something or even other than these. Consideration play vital role in the a valid contract and it is like a backbone in the human body which may help the being to stand without any support