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Consideration must move at the desire of the promisor

It is a fundamental rule that the action or forbearance must be done at the desire of promisor. If it is not done at the desire of the promisor or done at the desire of a third party, then it will not be a valid consideration. Similarly, acts done voluntarily or services rendered without any request cannot constitute a valid consideration.



Mahesh sees one person drowning and saves his life. Mahesh cannot demand payment for his services as it is a voluntary act done by him which the other person never asked him to do so.


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Consideration may move from the promisee or any other person on his behalf

As long as there is consideration for a promise it is immaterial as to who furnishes the same. Thus an act constituting consideration may be done by the promisee himself or may proceed from third person also. The judgement that the consideration may move from the promisee or any other person on his behalf is valid was given in a landmark case law of Chinnaya vs. Ramayya.
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Consideration must be real and not illusory

Consideration is not valid if it is to do an act which is
  • Physically impossible
  • Legally not permissible
  • Uncertain

Amar promises to put life into Akbar’s dead wife and Akbar in turn promises to pay ₹ 1,00,000. This agreement is void because the consideration is physically impossible to perform.

Consideration may be past, present or future

  • Past Consideration
    If the consideration by a party for a present promise was given in the past i.e., before the date of promise, it is called a past consideration. It is also known as an executed consideration.

Sunil finds Anil’s purse and returns it to Anil. Anil promises to pay ₹ 100 to Sunil after 5 days. The consideration provided by Sunil (finding the purse) for Anil’s promise to pay is a past consideration, something done before Anil makes the promise.


Note: The English Law does not recognise past consideration.

  • Present Consideration
    The consideration which moves simultaneously with the promise is called present considerationIt is in the process of execution. Cash sales are the most common examples of present consideration as both or one of the parties furnishes consideration at the time of formation of the contract.

Kumar sells the goods and delivers the goods to Gopal and at the same time Gopal pays the price.

  • Future Consideration
    The consideration which moves after the formation of contract is called future consideration or executory consideration. In the case of future consideration both the parties promise to perform their obligation after the formation of the contract.

Suresh promises to deliver certain goods to Ramesh at a future date and Ramesh promises to pay on delivery.

Consideration need not be adequate

The consideration by one of the parties may not be adequate. The consideration may be adequate, inadequate or grossly inadequate. The adequacy of the consideration is for the parties to decide and the law does not interfere with the same. The only thing required is that the consideration must be of some value in the eyes of law, however small it may be. Sec 25 exp 2 however states that inadequacy of consideration may be taken into account by the court in determining the question that the consent of the parties to the contract was free or not.



Amar agrees to sell his house to Akbar for ₹ 10,000. The house could be sold for about ₹ 1,00,000. Later on, Amar cannot refuse to sell his house to Akbar on the grounds that the consideration is not adequate. However, if Akbar had received Amar’s consent by unfair means, i.e. at knife point etc., then Amar can refuse to sell the house to Akbar as the consent of Amar is not free.


Consideration must be something which the promisor is not already bound to do

A promise to do what one is already bound to do either by general law or under an existing contract, is not a good consideration for a new promise, since it adds nothing to the pre-existing legal or contractual obligation. Likewise, a promise to perform a public duty by a public servant for something in return is not a consideration.


Note: When a person being already under a legal or contractual duty to do something undertakes to do something more than he is bound to do under the original contract, it will be a good consideration for the promise


Akbar contracted with Anthony, a doctor, to diagnose Akbar’s son for ₹ 5,000. In addition to this, Akbar asked Anthony to visit his home once a week to check his son, for which Akbar agreed to pay ₹ 1,000 extra. The above contract is valid, as the doctor is undertaking something more than he is bound to in the original contract.

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Consideration must not be illegal

The consideration to a promise must not be unlawful or opposed to public policy. The consideration to an agreement is unlawful, if:
  • It is forbidden by law
  • It defeats the provisions of law
  • It is fraudulent
  • It involves injury of a person or property
  • It is immoral or opposed to public policy



Raju told Ramesh that he would pay him ₹ 10,000, if he murders Anthony. Such agreements cannot be enforced in the court of law as the consideration is illegal.


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