Consideration is one of the integral parts of a contract. Without lawful consideration an agreement cannot be entered into- Critically analyze the basic legal provisions of consideration in the law of contract


Contract word come from the “Latin work Constructs”. The terms of the contract, meaning, the who, what where, when and how of the agreement, define the binding promises of each party to the contract.[1] Contract is one type of agreement between two or more competent parties in which an offer is made and accepted, and each party benefits. A contract is an agreement enforceable at law made between two or more persons, by which rights are required by one or more by to acts or forbearances on the part of the other or others.[2] Every agreement and promise enforceable at law is a contract. Contract is an agreement between two or more persons to do or to refrain from doing, a particular thing in exchange for something of value. Contracts can generally be written using formal or informal or informal terms, or they can be entirely verbal.

For example, if someone offered to drive you to work on Mondays and Tuesdays in exchange for your promise to return the favor on Wednesdays and Thursdays, a Bilateral Contract would be formed binding both of you once you provided consideration by accepting those terms. But if that same person offered to pay you $10 each day you drove him to work, a unilateral contract would be formed, binding only upon the promisor until you provided consideration by driving him to work on a particular day.[3]

A consideration of some sort or other is so necessary to the forming of a contract, that a nudum pactum or agreement to do or pay something on one side, without any compensation on the other, will not at law support an action; and a man cannot be compelled to perform it. The law supplies on means nor affords any remedy to compel the performance of an agreement made without consideration. This something in return is the consideration for the promise.

Section2 (d) of the Indian Contract Act defines consideration as follows:

“ When at the desire of the promise, the promise or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.”

 Importance oconsideration in the law of Contract:

It is perhaps dangerous to make broad general comments on a book of this nature, containing as it does fifteen distinct essays. Nevertheless, certain aspects are worthy of note. As already stated, the participants were encouraged to analyse “doctrines considered tangential or antiquated”. It is no surprise, then, that several essays focus on the doctrine of consideration: a doctrine mysterious to those who do not come from a Common Law background. The doctrine is clearly alive and well. One of the leading texts on English contract law, Treitel’s The Law of Contract, edited by Edwin Peel and now in its twelfth edition, devotes just over 100 pages to the doctrine. Its existence poses problems on a wider scale: as we march towards the further Europeanisation of contract law, it throws into question the possibility of further harmonisation. Clearly this doctrine continues to shape the leading theories applied to contract law in Common Law systems. Stephen Waddams, in his contribution, “Principle in Contract Law: the Doctrine of Consideration”, provides a useful summary of the doctrine, in all its fragmented glory. Waddams also explores the link between consideration and contracts for the benefit of third parties. He suggests that statutory reform in England has not met with success and summarises the difficulties involved in the creation of a workable third party right. This may lead the Scottish reader to admire his or her own version, the jus quaesitum tertio, but lament the fact that it is so under-used.[4]

 Considerations for contract:

The above juridical development deprived European private law of the most obvious explanation for the nature of many transactions. It is a fact that, while we normally expect to receive something in exchange for what we give, there are also many occasions on which we undertake duties without being able to compel a counter-performance from anyone For such transactions, the best explanation is that they constitute a unilateral promise, such a promise being a declaration by which one party commits itself to some future performance in favour of another, and to which commitment it binds itself as a result of that declaration alone. All legal systems wish to recognize, in some types of circumstance, the efficacy of such unilateral promises, but they often do so by forcing promise to wear the borrowed clothing of contract. This is least is the thesis advanced here, though it is freely admitted that adoption of such a thesis would cause most European legal systems some degree of realignment, especially those with a requirement of mutual consideration for contracts.[5]

 Types of Consideration:

There are mainly three types of consideration, and those are:

Present consideration: Present consideration is which promise is done by present.

Suppose- I want to go to Dhanmondi, that’s why I go to bus stand, to the bus counter I told the counterman, give me a ticket to dhanmondi, he told me give money  and I give him the money and he give the ticket to dhanmondi. It is a present consideration.

 Future consideration: is what we promise to exchange, we exchange it in future.

Suppose-   A and B made a promise that, A will buy B’s car at cost $1000 after 15 days. And it is a future consideration.

 Past consideration: it means “What I have done before but I get payment right now”. And I don’t expect it.

Suppose- My relative gives me a work to do before. And I have been done it that time. Right now my relative gives me some money now which I am not expecting.

In three cases past consideration for a promise does suffice to make the promise binding.

  1. Bill of exchange
  2. Recovery of a dept
  3. Service made on request.

 Rules of consideration in contract:

  1. Consideration must move at the desire of the promisor: In order to constitute legal consideration, the act or abstinence forming the consideration for the promise must be done at the desire or request.
  2.  Consideration must be real: In the eye of law the consideration must be real. It must not be sham or illusory. Suppose Y promises to supply X one tola gold of gold from the moon. The consideration is sham and illusory and there is no contract
  3. The consideration must not be illegal, immoral or opposed to public policy: If the consideration of the objective of the agreement is illegal, the agreement cannot be enforced. Present, past and future: In the consideration present past and future consideration must have to be available, without this three it will not a consideration.
  4. From the promises or any person: Consideration need not move from the promises alone but may proceed from a third person.

 No Consideration NO Contract:

A promise without consideration is a wanton undertaking and cannot create a legal obligation.

Consideration for a particular promise exists where some right, interest, profit or benefit accrues to the promisor as a direct result of some forbearance, detriment, loss or responsibility that has been given, suffered or undertaken by the promisee. Contract is an exchange of promises between two or more parties to do or refrain from ding an act which is enforceable in a court of law.

Contract out of love and affection, “If agreement made without consideration is void unless it is expressed in writing and registered under the law for the time being enforce for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other.”[6]

Contract for repayment of time barred debt, “If agreement made without consideration is void, unless it is a promise in writing and signed by the person to be charged therewith or by his agent generally or specially authorized in that he half, to pay wholly or in part a debt of which the creditor might have enforce payment but for the law of limitation for suits.”[7]

Contract of remission or waiver of rights, “Every promise may dispense with or remit, wholly or in part the performance of the promise made to him or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit.”[8]

Contract for appointing agent, “No consideration is necessary to create an agency.”[9]

An agreement made without consideration is void. It means that consideration is a must in all cases.[10]


 The promise was clear and definite, justifiable relied on the promise, substantial and of a definite character and will serve the best interests of justice. The consideration is very respecful thing any contract.

In my  above research it is clear that consideration is some thing that all are about contract .and also we knew agreement is also a contract. The contract is valid this time, in our daily or business purpose it need every sector we need we know what is that,what is its value and how it apply.


 Web Sites:

  1. Web address:–, collected on February 29, 2012 at 7.30 pm to 8.00 pm.
  2. Web address:, collected on February 29, 2012 at 7.30 pm to 8.00 pm.
  3. Web address:, /contract law/lecture notes, collected on February 29, 2012 at 7.30 pm to 8.00 pm.
    1. Web address:, collected on February 29, 2012 at 8.30 pm to 9.00 pm.
      1. Web address:, collected on                  February 25, 2012 at 8.00 am to 9.00 am.
      2. Web address: www. & consideration, collected on February 25, 2012 at 8.00 am to 8.30 am.
      3. Web address: www., Retrieved on February 25, 2012 at 9.00 am to 9.30 am.
      4. Web address:, Retrieved on February 26, 2012 at 11.30 pm to 12.30 am.
      5. Web address:, Retrieved on February 29, 2012 at 7.00 pm to 9.30 pm.
      6. Web address:, collected on February 29, 2012 at 7.30 pm to 8.00 pm.

[2] See Sir Willium Anson, Law of contract (1920).

[3] Definition of Consideration with example from books and internet sources.

[4] Importance of consideration , from online library from cases- Frederick Wilmot-Smith, Replacing Risk-Taking Reasoning,  Law Quarterly Re

view, 2011.

[5] Requirement of mutual consideration for contract from online library.-Martin A. Hogg, Promise: The neglected obligation in European private Law, International and Comparative Law Quarterly, 2010.

 [6] Section 25 (1), and Raj Luckhy Debee Vs. Bhootnath (1900) said.

[7] Section 25 (3), and Appa Rao Vs. Surya Prakash (1900) said.

[8] Section 63, and Kapur Chand Godha Vs. Mir Nawab Himayat Ali Khan (1963) said.

[9] Section 185 said.

[10] Show is,