{"id":3906,"date":"2020-03-11T13:55:34","date_gmt":"2020-03-11T13:55:34","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3906"},"modified":"2020-03-11T13:55:34","modified_gmt":"2020-03-11T13:55:34","slug":"no-consideration-no-contract","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/no-consideration-no-contract\/","title":{"rendered":"NO CONSIDERATION NO CONTRACT"},"content":{"rendered":"\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"no-consideration-no-contract\"><strong>NO CONSIDERATION NO CONTRACT<\/strong><\/h2>\n\n\n\n<p>A promise without <a href=\"https:\/\/commerceiets.com\/valid-consideration\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"consideration (opens in a new tab)\">consideration<\/a> cannot create a legal obligation. The general rule is that an agreement made without consideration is void. This rule is contained in <strong>Section 25 of the <\/strong><a href=\"https:\/\/commerceiets.com\/indian-contract-act-1872\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Indian Contract Act,  (opens in a new tab)\"><strong>Indian Contract Act<\/strong>, <\/a>which declares that \u2018an agreement made without consideration is void\u2019. This means that consideration is a must in all the cases. But this Section provides certain exceptions where an agreement is valid even without consideration. These cases are:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"635\" height=\"351\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/image-34.png\" alt=\"\" class=\"wp-image-3908\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/image-34.png 635w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/image-34-300x166.png 300w\" sizes=\"(max-width: 635px) 100vw, 635px\" \/><\/figure>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>AGREEMENT MADE ON ACCOUNT OF NATURAL LOVE AND AFFECTION: UNDER\nSECTION 25 (1)<\/strong><\/p>\n\n\n\n<p>An agreement without consideration is enforceable if, it\nis <\/p>\n\n\n\n<ul><li>expressed in writing and <\/li><li>registered under the law for the time being in force for\nthe registration of documents, and is <\/li><li>made on account of natural rove and affection, (iv)\nbetween the parties standing in near relation to each other.<\/li><\/ul>\n\n\n\n<p><strong>The following conditions must be satisfied\nfor the application of the exception:<\/strong><\/p>\n\n\n\n<ul><li>The agreement is in writing<\/li><li>It is registered.<\/li><li>It is made on account of natural love and affection<\/li><li>It is between parties standing in near relation to each\nother.<\/li><\/ul>\n\n\n\n<p><strong>Example:<\/strong>&nbsp;A, out of natural love and affection,\npromises to give his son B 5,000. A puts his promise to B in writing and\nregisters it. This is a valid contract. <\/p>\n\n\n\n<p>The expressions \u2018near relations\u2019 and \u2018natural love and\naffection\u2019 have not been defined in the Indian Contract Act.<\/p>\n\n\n\n<p>However,\nthe expression \u2018near relations\u2019 will include parties related by blood or marriage.\nSome kind of natural love and affection is also implied. But love and affection\nmay, sometimes, be overruled by external circumstances. The following case\nvalidate the same:<\/p>\n\n\n\n<p><strong><em>CASE: RAJLAKHI DEVI VS. BHOOTNATH<\/em><\/strong><\/p>\n\n\n\n<p>A husband\npromised to pay his wife a fixed sum of money every month for her separate\nresidence and maintenance. The agreement was contained in the registered\ndocument which mentioned certain quarrels and disagreements between the two.\nThe court refused to hold the agreement valid as it could not find any love and\naffection between the parties whose quarrels had compelled them to separate.<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>AGREEMENT TO COMPENSATE FOR PAST VOLUNTARY SERVICES: UNDER\nSECTION 25 (2)<\/strong><\/p>\n\n\n\n<p>An agreement without consideration is enforceable, if it\nis a promise to compensate&nbsp;wholly, or in part a person who has already\nvoluntarily done something for the promisor, or something which the promisor\nwas legally bound to do.&nbsp;<\/p>\n\n\n\n<p><strong>Example:<\/strong>&nbsp;A finds B\u2019s purse and gives it to him.\nB promises to give him 100. This is a contract.<\/p>\n\n\n\n<p>In\norder that a promise to pay for past voluntary services be binding, the\nfollowing conditions must be satisfied :<\/p>\n\n\n\n<ul><li>The services should have been rendered voluntarily.<\/li><li>The services must have been.rendered for the promiser and\nnot anybody &nbsp;else<\/li><\/ul>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>AGREEMENT TO PAY TIME-BARRED DEBT: UNDER SECTION 25(3)<\/strong><\/p>\n\n\n\n<p>According to this exception, a promise to pay a\ntime-barred debt wholly or in part is enforceable if such promise is in writing\nand signed by the debtor or his authorized agent. A time barred debt-cannot be\nrecovered and, therefore, a promise to repay such debt is without\nconsideration.<\/p>\n\n\n\n<p><strong>The following conditions must be satisfied for the\napplication of this exception:&nbsp;<\/strong><\/p>\n\n\n\n<ul><li>The promise should be in writing.<\/li><li>It should be signed by the promisor or his authorized\nagent.<\/li><li>The debt must be time-barred i.e., the limitation period\nfor the recovery of the debt must have expired<\/li><li>There must be an express promise to pay. It may be to pay\nwhole or part of the debt.<\/li><\/ul>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>COMPLETED GIFT<\/strong><\/p>\n\n\n\n<p>The gift actually made by a donor and accepted by the\ndone will be valid even without the consideration. So in case of a gift\nactually made, consideration is not necessary.<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>CONTRACT OF &nbsp;AGENCY<\/strong><\/p>\n\n\n\n<p><strong>Section 185 <\/strong>specifically states that no consideration is necessary to create an agency. Thus, when a person is appointed as an agent, his appointment is valid even if there is no consideration. Although, generally, an agent gets remuneration by way of commission for the services rendered, but no consideration is immediately necessary at the time of appointment.<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>REMISSION: UNDER\nSECTION 63<\/strong><\/p>\n\n\n\n<p>No consideration is required for an agreement to receive\nless then what is due. This is called remission in the law.&nbsp;<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>CHARITY<\/strong><\/p>\n\n\n\n<p>If a person undertakes a liability on the promise of\nanother to contribute to charity, then the contract is valid. In this case, the\nno consideration no contract rule does not apply.<\/p>\n\n\n\n<p><strong>Example:<\/strong>&nbsp;Peter is the trustee of his town\u2019s charity organization. He wants to build a small pond in the town to enhance greenery and offer the residents a good place to walk around in the evenings. He raises a charity fund where he appeals to people to come ahead and contribute to the cause. Many people come forward as subscribers the fund and agree to pay Peter their share of the amount once he enters into a contract for constructing the pond.<\/p>\n\n\n\n<p>After raising half the amount, Peter hires contractors for building the pond. However, 10 people back out at the last moment. Peter files a suit against them for recovery. The Court ordered the 10 people to pay the amount to Peter since he had undertaken a liability based on their promise to pay. Even though there was no consideration, the contract was valid and enforceable by law.<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>BAILMENT<\/strong><\/p>\n\n\n\n<p><strong>Section 148 <\/strong>of the Indian Contract Act, 1872, defines bailment as the delivery of goods from one person to another for some purpose. This delivery is made upon a contract that post accomplishment of the purpose, the goods will either be returned or disposed of, according to the directions of the person delivering them. No consideration is required to effect a contract of bailment.<\/p>\n\n\n\n<p><strong>JOIN THE CHANNEL ON TELEGRAM<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/t.me\/commerceiets\" target=\"_blank\">https:\/\/t.me\/commerceiets<\/a><\/p>\n\n\n\n<p><strong>CONNECT ON LINKEDIN<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noopener\">https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NO CONSIDERATION NO CONTRACT A promise without consideration cannot create a legal obligation. The general rule is that an agreement made without consideration is void. This rule is contained in Section 25 of the Indian Contract Act, which declares that \u2018an agreement made without consideration is void\u2019. This means that consideration is a must in&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/no-consideration-no-contract\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;NO CONSIDERATION NO CONTRACT&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3910,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3906"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3906"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3906\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3910"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}