Page 9 - 01. Indian Contract Act, 1872

 It must be real and not vague.

 It must be legal
 It need not be adequate (but if not adequate then consent must be free)

 It must be something more than the promise is already bound to do for the

promisor
Kinds of Consideration

A. Past consideration – it refers to something wholly done, forgone or suffered

before making of agreement.
B. Present or executed consideration – It moves simultaneously with promise.

The consideration which is completed or performed at the time of contract is
called present consideration.

C. Future or Executory Consideration – it is to be moved at a future date i.e
promise is to be performed in future.

Exceptions to the rules, “ No consideration, No contract
 An agreement made is valid if.

a) Expressed in writing and registered under law.

b) Made on account of natural love and affection,
c) Between parties standing in near relation to each other.

d) A promise to pay, wholly or in part, a debt, which is barred by law of limitation
can be enforced if –

i. It is in writing
ii. It is signed by the debtor or his authorized agent.

e) It does not applies to completed gifts I e gift given and accepted

f) Consideration is not required to effect a valid bailment of goods i.e
gratuitous bailment

g) Not required to create an agency
h) It a person promised to contribute anything to a charity and on his faith the

promise undertakes a liability to that extent , the contract shall be valid.

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