How Far It Is True Agreement Without Consideration Is Void?

Section 25 of the Indian Contract Act, 1872 provided that “Agreements without consideration is void unless it is in writing and registered, or is a promise to compensate for something, or is a promise to pay debt time-barred by the limitation law.”



What is a consideration fee?

It is what each party gives the other party as part of the bargain. Consideration could be the payment of money, the discharge of debt, the performance of services, or anything else of value. Real estate may be transferred with or without consideration.


What is good consideration in law?

To be good consideration, it must have some value, even though it is very small value. Which mean that when the parties exchange the value, so exchanging the value, it has to be sufficient but need not to be adequate.


Is consideration required for a contract?

Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from doing an act.


How far it is true agreement without consideration is void?

Section 25 of the Indian Contract Act, 1872 provided that “Agreements without consideration is void unless it is in writing and registered, or is a promise to compensate for something, or is a promise to pay debt time-barred by the limitation law.”


What does it mean to offer a consideration?

A legally binding contract needs three main elements: an offer, consideration, and acceptance. While the terms "offer" and "acceptance" are fairly straightforward -- an offer is made, and either rejected or accepted -- "consideration" refers to something of value that is being gained through the contract.


Why is consideration needed?

In order to create a legally valid contract, the parties will need to exchange something of value. This value is referred to as “consideration.” Consideration is one of the three main requirements of forming a contract.


What is consideration in a contract and why is it important?

Consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract. Consideration must be of value and is exchanged for the performance or promise of performance by the other party (such performance itself is consideration).


Which of the following are examples of consideration?

Which of the following are examples of consideration? Consideration may be a benefit to the promisor, a detriment to the promisee, a promise to do something, or a promise to refrain from doing something.


Is an agreement without consideration valid?

The Indian Contract Act of 1872 states that for any contract to be legally binding, consideration should be provided. An agreement without consideration is not considered valid.


What is the purpose of consideration?

Key Takeaway. Consideration is—with some exceptions—a required element of a contract. It is the bargained-for giving up of something of legal value for something in return. It serves the purposes of making formal the intention to contract and reducing rash promise making.


Under what situation is consideration not binding?

Under what situations is consideration not binding? Consideration is not binding if the promise does not create a duty or impose an obligation such as with illusory promises. Illusory promises include termination clauses in contracts and output and requirements contracts.


What will happen if consideration is missing in an agreement?

In simple words, no consideration no contract. Hence, you can enforce a contract only if there is a consideration. While considerations are integral to a contract, the Indian Contract Act, 1872 has listed some exceptions whereby an agreement made without consideration will not be void.


What does consideration mean in legal terms?

Something of value to which a party is not already entitled, given to the party in exchange for contractual promises. Consideration can take various forms, including a: Monetary payment. Promise to do something. Promise to refrain from doing something.



Dated : 21-Jul-2022

Category : Education

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