Meaning of Consideration
Consideration is a vital element in forming a valid contract. It refers to something in return—what each party gives or promises to give under the contract.
According to Section 2(d) of the Indian Contract Act, 1872,
“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.”
Types of Consideration
- Past Consideration – Something done in the past at the promisor’s desire.
- Present Consideration – Simultaneous exchange of promises or acts.
- Future Consideration – Promise for something to be done in the future.
Essentials of Valid Consideration
- Must move at the desire of the promisor.
- May move from the promisee or any other person (Doctrine of Privity of Consideration).
- May be past, present, or future.
- Must be lawful.
- Must have some value in the eyes of law (need not be adequate).
No Consideration, No Contract – Exceptions
As per Section 25, a contract without consideration is void, except in the following cases:
- Agreement made out of natural love and affection between close relations (in writing and registered).
- Promise to compensate for something voluntarily done.
- Promise to pay a time-barred debt.
Meaning of Object in Contract Law
Object refers to the purpose or design of the agreement.
Under Section 23 of the Indian Contract Act,
“The consideration or object of an agreement is lawful, unless – it is forbidden by law, or defeats the provisions of any law, is fraudulent, involves injury to person/property, or is immoral or opposed to public policy.”
Unlawful Object
If the object of an agreement is unlawful, the contract is void.
Illustrations of Unlawful Object:
- Agreement to smuggle goods – void.
- Agreement to pay someone to influence public servants – void.
Important Case Laws
Chinnaya v. Ramaya (1882)
Held that consideration may move from a third party.
Durga Prasad v. Baldeo (1880)
Consideration must be at the desire of the promisor.
Abdul Aziz v. Masum Ali (1914)
A mere promise to make a donation without consideration is unenforceable.
Kedar Nath v. Gauri Mohamed (1886)
Promise to donate was enforceable as there was detriment undertaken based on the promise.
Gherulal Parakh v. Mahadeodas Maiya (1959)
Object of contract must not be opposed to public policy.
Mind Map (Text Format)
Consideration and Object
→ Consideration
→ Defined under Section 2(d)
→ Must move at promisor’s desire
→ Past / Present / Future
→ Valid if lawful & with some value
→ Exceptions under Section 25
→ Object
→ Defined under Section 23
→ Must be lawful
→ Void if:
→ Forbidden by law
→ Fraudulent
→ Causes injury
→ Immoral
→ Against public policy
→ Case Laws
→ Chinnaya v. Ramaya
→ Kedar Nath v. Gauri Mohamed
→ Gherulal Parakh v. Mahadeodas Maiya
Situation-Based Questions
Q: A promises to pay B ₹10,000 if B marries A’s daughter without A’s consent. Is this contract valid?
A: No. The object is unlawful as it contravenes public morality and may violate personal liberty.
Q: X promises to donate ₹1 lakh to a temple, but later refuses. Temple had already started construction. Can the temple sue?
A: Yes. Based on Kedar Nath v. Gauri Mohamed, reliance on the promise and acting upon it creates enforceable liability.
Q: A gives a bribe to B for securing a government contract. Later, B refuses to return the money. Can A sue?
A: No. The object is unlawful (opposed to public policy), making the contract void.
FAQs
What is the difference between consideration and object?
Consideration is what each party gives in return; object is the ultimate purpose of the agreement.
Is a contract without consideration always void?
Yes, unless it falls under the exceptions in Section 25.
Can past consideration be valid?
Yes, if it was done at the promisor’s request.
Can consideration come from a third party?
Yes. Indian law allows third-party consideration.
What makes an object unlawful?
An object that is forbidden by law, fraudulent, causes injury, is immoral, or against public policy is unlawful.
