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Sukhpreet Kaur, Lovely Professional University Unit 4: Consideration

Unit 4: Consideration Notes

CONTENTS

Objectives
Introduction

4.1 Definition of Consideration
4.2 Rules Regarding Consideration

4.3 Unlawful Consideration and Object [Ss.23-24]
4.4 Stranger to Contract
4.5 Summary
4.6 Keywords
4.7 Self Assessment
4.8 Review Questions

4.9 Further Readings

Objectives

After studying this unit, you will be able to:

Explain the definition of consideration
Discuss rules regarding consideration

Introduction

In last unit you have studied about the capacity of contract. Consideration is one of the essential
elements to support a contract. Subject to certain exceptions, an agreement made without
consideration is nudum pactum (a nude contract) and is void. Consideration is a technical term
used in the sense of quid pro quo (i.e., something in return). When a party to an agreement
promises to do something, he must get “something” in return. This “something” is defi ned as
consideration. In the words of Pollock, “consideration is the price for which the promise of the
other is bought, and the promise thus given for value is enforceable.” (Pollock on Contracts,
13th ed., p. 113]. A agrees to sell his car to B for ` 50,000. Car is the consideration for B and price,
the consideration for A.

4.1 Definition of Consideration

In the English case of Currie v. Misa, (1875) L.R. 10 Ex. 153, consideration was defi ned by
Lush J. as follows:
“A valuable consideration in the sense of the law may consist either in some right, interest, profi t or benefi t
accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken

by the other. “But to this definition there should be added that “the benefit accruing or the detriment
sustained was in return for a promise given or received.”

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