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Sec 25(2) Compensation for past voluntary services

A promise to compensate wholly or in part, a person who has already voluntarily done something for the promisor, is enforceable, even though it is without consideration. In simple words, a promise to pay for a past voluntary service is binding. In order to pay for past voluntary services, the following factors must exist:
  • The service should be rendered voluntarily
  • The service must have been rendered for the promisor
  • The promisor must be in existence at the time when the services were rendered
  • The promisor must have intended to compensate the promisee
  • The services rendered should be lawful

Sunil finds Anil’s purse and gives it to him. Anil promises to give ₹ 500 to Sunil. This is a valid contract even though the consideration did not move at the desire of Anil, the promisor. Thus it can be enforced in the court of law and Sunil can recover the amount promised from Anil.


Sec 25(3) Promise to pay time-barred debt

Time barred debt refers to an amount which has remained unclaimed beyond a time period specified by the law of limitation.
A promise to pay a time-barred debt is enforceable if such a promise is in writing and duly signed by the promisor or his authorized agent. The following conditions must be satisfied for the application of this exception:
  • The promise to pay must be definite and expressed
  • The promise must be in writing
  • The promise must be signed by the promisor or his authorized agent
  • The debt must be time-barred i.e., the limitation period for the recovery of the debt must have expired
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Note: Similarly, a promise by a Hindu son to pay the time-barred debt of his deceased father does not come within this exception.


Note: A debt is barred by limitation if it remains unpaid or unclaimed for a period of three years in case of moveable property and twelve years in case of immovable property from the date it becomes due. Such a debt becomes legally irrecoverable.

Completed gift

‘Completed gift’ means a gift actually handed over. The gifts actually made by a donor and accepted by the donee are valid even without consideration. Thus, a completed gift needs no consideration.



On Gopal’s birthday, Ganesh gives him a gold chain as a birthday gift. In this case, Ganesh cannot demand back the chain on the ground that there was no consideration. In case of immoveable property the gift should be signed and registered in order to constitute a completed gift.

Contract of agency

No consideration is required for creation of contract of agency. The fact that the principal has agreed to be represented by the agent is sufficient ground for the principal to support the contract of agency. According to Sec. 185 of Indian Contract Act, no consideration is required to create the contract of agency.

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