Consideration is one of the integral parts of a contract. Without lawful consideration an agreement cannot be entered into. Discuss.


An the contract low consideration has been defined as 1 “when at the desire of the promisor , or any other person has done or abstained from doing , does or abstains from doing, 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. Sec. 2 (d).

 Consideration is used in the sense of quid pro quo. Its means something in return. It is very essential ingredient of a contract which is an agreement enforceable by law and each party in the agreement gets something and this is called consideration

Classification of consideration – Its may be classified into the following types-

Types of consideration


Consideration is called “executory” where there is an exchange of promises to perform acts in the future, eg a bilateral contract for the supply of goods whereby A promises to deliver goods to B at a future date and B promises to pay on delivery. If A does not deliver them, this is a breach of contract and B can sue. If A delivers the goods his consideration then becomes executed.


If one party makes a promise in exchange for an act by the other party, when that act is completed, it is executed consideration, eg in a unilateral contract where A offers £50 reward for the return of her lost handbag, if B finds the bag and returns it, B’s consideration is executed.

  1. Commercial Law- M. Ahammed (p.14)
  2. www.Google .com ( Price v Easton (1833) 4 B & Ad 433, Collins v Godefroy (1831) 1 B & Ad 950., Stilk v Myrick (1809) 2 Camp 317.,Hartley v Ponsonby (1857) 7 E & B 872)



If one party voluntarily performs an act, and the other party then makes a promise, the consideration for the promise is said to be in the past. The rule is that past consideration is no consideration, so it is not valid and cannot be used to sue on a contract. For example, A gives B a lift home in his car. On arrival B promises to give A £5 towards the petrol. A cannot enforce this promise as his consideration, giving B a lift, is past.


Providing consideration has some value, the courts will not investigate its adequacy. Where consideration is recognised by the law as having some value, it is described as “real” or “sufficient” consideration. The courts will not investigate contracts to see if the parties have got equal value.


The person who wishes to enforce the contract must show that they provided consideration; it is not enough to show that someone else provided consideration. The promisee must show that consideration “moved from” (ie, was provided by) him. The consideration does not have to move to the promisor. If there are three parties involved, problems may arise. See:


If one person has a valid claim against another (in contract or tort) but promises to forbear from enforcing it, that will constitute valid consideration if made in return for a promise by the other to settle the claim. See:


If someone is under a public duty to do a particular task, then agreeing to do that task is not sufficient consideration for a contract. See:

If someone exceeds their public duty, then this may be valid consideration. See:

2. www.Google .com ( Price v Easton (1833) 4 B & Ad 433, Collins v Godefroy (1831) 1 B & Ad 950., Stilk v Myrick (1809) 2 Camp 317.,Hartley v Ponsonby (1857) 7 E & B 872)


If someone promises to do something they are already bound to do under a contract that is not valid consideration. Contrast:

The principle set out in Stilk v Myrick was amended by the following case. Now, if the performance of an existing contractual duty confers a practical benefit on the other party this can constitute valid consideration.


If a party promises to do something for a second party, but is already bound by a contract to do this for a third party, this is good consideration. See:

Classification of consideration

3Classification of consideration – Its may be classified into the following types-

(1) A Past consideration is one when the consideration was given before the date of the promise.

(2) Present –When consideration goes along with the promise, this is called present consideration. For Example- Rahim purchase a “Watch” from a shop and pays the price immediately. The consideration, therefore, moving from ‘Rahim’ is a present or executed consideration.

 (3) Future- Future consideration is one when consideration moves at a future date, this is called executor consideration. For example- A agree to sell his house to B. B’s consideration here is executor if he is to pay the money at a future date.

 2. www.Google .com ( Price v Easton (1833) 4 B & Ad 433, Collins v Godefroy (1831) 1 B & Ad 950., Stilk v Myrick (1809) 2 Camp 317.,Hartley v Ponsonby (1857) 7 E & B 872)

3.  Commercial Law- M. Ahammed (p.14,)

 Exceptions to the rules of consideration

4 A contract must be establish on consideration for its vailidity. But there are exceptions are discussed below:

  1. An agreement made without consideration is treated as valid if it is writing and registered and if it is made for natural and affection. sec-25 (1)
  2. A promise made without consideration is treated as valid if it is a promise to compensate wholly or in part, a person voluntarily doing something for the promisor. Sec. 25 (7)
  3. A promise to pay a time –barred debt under debt under law of limitation can be enforced. The condition being that the promise has to be signed by the debtor and is in writing. Sec. 25 (3)

4. It is necessary that consideration should be according to the desire of the promiser. For example –Karim’s house caught fire . Rahim saw it and helped to put out the fair , karim did not request for Rahim’s help. As such Rahim cannot claim for payment for his job.

5. Consideration must have a value that can be objectively determined. A promise, for example, to make a gift or a promise of love or affection is not enforceable because of the subjective nature of the promise.

6. Consideration must be real. For example, Hassan promise to give TK.500 on condition that that there will be no consideration for that .This is not real contract.

7. Consideration must be legal and not immoral or opposed to public policy.

8. Consideration must be past, present or future

 4. Commercial Law- M. Ahammed,( p.16)

 Agreements of contract

5 Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

1. Vaidable Agreement –According to section 2 (i) of the contract act, “An agreement which is not enforceable by low at the option of one or more of the parties thereto, but not at the option of the other or others, is a viodable agreement.

2. Void Agreement – “An agreement not enforceable by low is said to be void”-sec. 2 (g). For example,-An agreement entered into by miner, agreement made against public policy etc.

3. Unforceble Agreement – Agreements which cannot be enforceable in a court of low because of technical defects are called unforceble agreement. For example,-An agreement

made without registration or non –payment of necessary stamp duty.

4. Illigal Agreement – Agreement made against the low in force in Bangladesh, are called    illegal agreement. For example,-An agreement made for performing a murder or robbery is an illegal agreement.

5. Valid Contract – An agreement that fulfills the essential elements of a contract and becomes lawfully enforceable, is called valid agreement

 5. Commercial Law- M. Ahammed,( p.17  , p 18)

 Legality of objective and consideration of contract


6 An agreement is unlawful in the cases mentioned as under-

1. If the agreement is forbidden by law- An act is forbidden by low when it is punishable by criminal low of the country.

2. If it is of such a nature that, if permitted it would defeat the provisions of any low. If the object or consideration of agreement is of such the agreement is void.

3. If it is fraudulent- An agreement becomes void if its object defrauds others.

4. If it causes enjoy to the person or property of another that is an agreement is void if its object is to cause injury to the person or property of another.

5. If the court considers it as immoral or opposed to the public policy.

6. Commercial Law- M. Ahammed,( p.28  , p 29)

 What is good consideration

The rules or the necessary factors for consideration can be summed up as follows:

(1) there must be desire of the promisor;

(2) it must be real;

(3) reasonable;

(4) not illegal, immoral or opposed to public policy;

(5) present, past or future ; and

(6) from the promisee or any person.

Subject to the above essential factors, a good consideration can be any of the following:

 (1) physical goods;

(2) services;

(3) forbearance (for example not to sue);

(4) arbitration or the compromise of disputed claims, and

(5) settlement or composition with creditors.

 An agreement without consideration is valid only if the following requirements are complied with:

(i) The agreement is made by a written document.

(ii) The document is to be registered.

(iii) The agreement is made on account of natural love and affection. Ex: A for natural love and affection, promises to give his son B, $.1, 000. A puts his promise to B in writing and registered it. This is a contract.

(iv)The parties to the agreement stand in a near relation to each other.

 2. Voluntary Compensation :

 D finds B’s purse and gives it to him. B promises to give D $. 50. This is a contract.

 D supports B’s infant son. B promises to pay D’s expenses in so doing. This is a contract.

 3. time-barred debt:

D woes B $ 1000 but the debt is barred by the Limitation Act. D signs a written promise to pay B $.500 on account of the debt. This is a contract.

 4. Agency:

No consideration is required to create an agency.

 5. Completed gift:

If a person gives certain properties to another according to the provisions of the Transfer of Property Act (i.e., by a written and registered document) he cannot subsequently demand the property back on the ground that there was no consideration.


  • Consideration provided by each of the parties- this means that there must be some kind of exchange between the parties.
  • 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 to abstain from doing something , such act or  abstinence or promise is called a consideration for the promise.
  • A better definition adopted by the House of Lords in Dunlop v Selfridge is an act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.
  • In summary, consideration means  a reasonable equivalent or other  valuable benefit passed on by the promisor to the promisee