Explain Consideration and it's essential with the suitable act, case law, example according to Indian contract act 1872

Introduction

Consideration is an essential element in a contract, which refers to something of value exchanged between the parties to the contract. In Latin term “Quid pro quo” means Something in Return. Consideration is a crucial aspect of a contract because it is what distinguishes a contract from a mere promise. The Indian Contract Act, 1872 defines consideration as “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 abstain from doing something, such act or abstinence or promise is called a consideration for the promise.”

Essentials of Consideration:

1. It must move at the desire of the promisor: Consideration must move from the promisee or any other person at the request of the promisor.
2. It must be something of value: Consideration must be something of value in the eyes of the law.
3. It must be lawful: The consideration must be lawful, otherwise, it would not be considered valid in the eyes of the law.
4. It must be real: Consideration must be real, i.e., it must have some value in the eyes of the law.
5. It must not be illusory: The consideration must not be illusory or vague, otherwise, it would not be considered valid.

Example of Consideration:

Suppose A offers to sell his car to B for Rs. 2,00,000. B accepts the offer and pays the money to A. Here, the consideration for A’s promise to sell the car is the payment of Rs. 2,00,000 by B. Similarly, if A promises to repair B’s car in exchange for Rs. 10,000, the consideration for A’s promise to repair the car is the payment of Rs. 10,000 by B.

Acts related to consideration:

1. Indian Contract Act, 1872: This act defines consideration as an essential element of a contract.
2. Transfer of Property Act, 1882: This act lays down the rules for the transfer of property from one person to another.
3. Sale of Goods Act, 1930: This act governs the sale of goods and lays down the rules for the transfer of property in goods from the seller to the buyer.

Case law related to consideration:

Chinnaya vs Ramayya: In this case, the plaintiff, Chinnaya, had given a promise to pay a sum of money to the defendant, Ramayya. However, the consideration for this promise was not established. The court held that a promise without consideration is not enforceable under the Indian Contract Act.

Thomas vs Thomas: In this case, the plaintiff, Mrs. Thomas, had promised to pay rent to her late husband’s brother, Mr. Thomas. The court held that the consideration for Mrs. Thomas’s promise was the brother’s agreement to transfer the possession of the property to her. Therefore, the promise was enforceable.

The Allahabad High Court ruled in Nutan Kumar v. Additional District Judge, Banda (AIR 1994 Allahabad) that any arrangement between a landowner and tenant that is at odds with the provisions of the Rent Control Act is null and void. These agreements cannot be upheld in court.

Masum Ali vs. Abdul Aziz (1914)

Facts: In order to execute a commitment that the promisor had made to contribute Rs. 500 towards the reconstruction of a mosque, the secretary of a mosque committee filed a lawsuit.

According to the judgement, “The promise was not enforceable because there was no consideration in the sense of benefit” because “the person who promised gained nothing in return for the promise made” and “the secretary of the committee to whom the promise was made” suffered no harm (liability) because nothing had been done to carry out the repairs. Therefore, the lawsuit was dropped.

Conclusion

In conclusion, consideration is an essential element in a contract, and it must be something of value that is exchanged between the parties to the contract. The consideration must be lawful, real, and not illusory or vague. The Indian Contract Act, 1872 defines consideration as an essential element