Question 1 OR (a)

No consideration, no contract, and its exceptions

10 marks

Time to write
About 20 minutes

From an older CBCS paper

Question

Question 1 OR (a) · 10 marks

Explain the ‘no consideration, no contract’ principle. To it, are there any exceptions? Elaborate.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

20 minfor 10 marks

Read from the question

  • Explain…Are…?2 asks, each with its own marks below. Answer both.

What the paper leaves open

The only copy of this paper found is cut off at the right edge of the page; the few words lost there are read from the sense and from the Hindi version of the question. The mark for this part is not legible on the copy; it is reckoned here at 10 marks, the paper's own split for its other questions.

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 The principle 2 marks 4 min
  3. 2 Exceptions with examples 8 marks 14 min
  4. Check: every ask answered, key terms underlined 1 min

Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.

Try it first. About 20 minutes for 10 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

The principle. An agreement without consideration is void: "no consideration, no contract" is the general rule of law. Consideration is the price of the promise: something done or abstained from, or promised, at the desire of the promisor by the promisee or any other person (s. 2(d)).

Picture itNo consideration, no contract, and its exceptions

1Out of pure affection, the elders register the gift deed for their nephew at the registry desk.

Natural love and affectionA written and registered agreement made out of natural love and affection between parties who are near relatives.

2The boy had dragged the flooded godown's sacks to safety unasked—now the owner puts the promise in writing.

Compensation for past voluntary servicesA promise to compensate a person who has already voluntarily done something for the promisor.

3The debt is older than the law allows, cobwebs and all—yet the old man signs a fresh promise to pay.

Promise to pay a time-barred debtA written and signed promise to pay, wholly or in part, a debt barred by limitation.

Exceptions in which an agreement without consideration is valid:

  1. Natural love and affection (s. 25(1)): a written and registered agreement made out of natural love and affection between parties in a near relation.
  2. Past voluntary services (s. 25(2)): a promise to compensate a person who has voluntarily done something for the promisor. If P finds R's wallet and gives it back, R's promise to give P ₹10,000 is a valid contract.
  3. Time-barred debt (s. 25(3)): a written promise, signed by the person to be charged or his agent, to pay a debt barred by limitation; a signed promise to pay ₹50,000 of a time-barred ₹60,000 debt is enforceable for ₹50,000.
  4. Agency: no consideration is necessary to create an agency (s. 185).
  5. Completed gift: the rule does not affect a gift actually made.
  6. Bailment: no consideration is required for a contract of bailment.
  7. Charity: where the promisee undertakes a liability on the faith of a promise to contribute to charity, the contract is valid.

Where the 10 marks sit

#ComponentMarks
1The principle2
2Exceptions with examples8
Total10
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