Consideration must be present but need not be adequate

(ii)True An agreement made without consideration is void (s. 25), so consideration must be present, save in the three cases the section itself excepts: a written and registered promise made out of natural love and affection between parties in a near relation; a promise to make good, in whole or in part, to someone who has already, of his own accord, done something for the promisor (or something the promisor could be compelled by law to do); and a written promise, signed by the person to be charged or his agent, to pay all or part of a time-barred debt. A gift actually made is not affected by the rule (s. 25, Explanation 1). Adequacy is another matter: an agreement to which the promisor's consent “is freely given is not void merely because the consideration is inadequate”, though the court may take the inadequacy into account in deciding whether his consent was freely given (s. 25, Explanation 2). A agrees to sell a horse worth ₹1,000 for ₹10: if A's consent was freely given, the agreement is a contract notwithstanding the inadequacy.