Business Environment and Law-Global Trends In Business And Management
Essentials Of Consideration-Law Of Contract
Posted On :
Essentials Of Consideration-Law Of Contract
Essentials
Of Consideration
An analysis of the above definition reveals the following essentials of consideration.
(A) Based on Definition
An analysis of the above definition reveals the following essentials of consideration.
1. Consideration must move at the desire of the promisor
2. It may move from promisee or from any other person on behalf of promisee.
3. Consideration may be past, present or future
4. Consideration must be real and not illusory
5. Consideration may consist of an act, abstinence or promise
2. It may move from promisee or from any other person on behalf of promisee.
Stranger to Contract
It is a general rule that a person, who is not a party to a contract, cannot sue on the contract even though the contract is for his benefit i.e. unless there is privity of contract ,the relationship is not enforceable.3. Consideration may be past, present or future
4. Consideration must be real and not illusory
5. Consideration may consist of an act, abstinence or promise
(B) Based on other provisions
In addition to the above essentials of consideration that emerge from the definition, the others are as follows:1. Consideration must be lawful: (Sec. 10) “All agreements are contracts, if they are made for a lawful consideration” The consideration of an agreement is unlawful, if (i) it is forbidden by law, or (ii) it is of such a nature that, if permitted, it would defeat the provisions of any law, or (iii) it is fraudulent or (iv) it involves or implies injury to the person or property of another or (v) the court regards it as immoral or opposed to public policy (Sec. 23).
2. Consideration need not be adequate to the value of the promise: (Sec. 25) “An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate, but the inadequacy of the consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given.”
Tags : Business Environment and Law-Global Trends In Business And Management
Last 30 days 237 views
