Page 43 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes The defi nition in Currie v. Misa. in effect, means that consideration must result in a benefi t to the
promisor, and a detriment or loss to the promisee, or a detriment to both, e.g., A lends his bicycle
to B who promises to return it after use. This results in a benefi t to B (as he gets the use of the
bicycle) and a detriment to A (as he parts with his bicycle) which is in consideration to support
the promise to return the bicycle.

Justice Patterson defines consideration in the following words. “Consideration means something

which is of some value in the eye of law ... It may be some benefit to the plaintiff or some
detriment to the defendant” [Thomas v. Thomas, (1842) 2 Q.B. 851]. There are two leading cases
which explain this point

Abdul Aziz, v. Masum Ali (1914) 36 All. 268. The secretarym, a Mosque Committee, filed a suit to
enforce a promise which the promisor had made to subscribe ` 500 to the rebuilding of a mosque,
held, “the promise was not enforceable because there was no consideration in the sense of
benefit”, as “the person who made the promise gained nothing in return for the promise made”,

and the secretary of the Committee to whom the promise was made, suffered no detriment as
nothing had been done to carry out the repairs. Hence, the suit was dismissed.
Kedar Nath v. Gauri Mohamed, (1886) 14 Cal. 64. The facts of this case were almost similar to
those of the previous case, but the secretary in this case incurred a liability on the strength of the
promise. Held, the amount could be recovered, as the promise resulted in a suffi cient detriment
to the secretary. The promise could, however, be enforced only to the extent of the liability
(detriment) incurred by the secretary. In this case, the promise, even though it was gratuitous,
became enforceable because on the faith of the promise the secretary had incurred a detriment.
Sec. 2 (d) defines consideration as follows: “When at the desire of the promisor, the promisee

or any other person has done or abstained from doing, or does or abstains from doing, or
promises to do or to abstain from doing, something, such act or abstinence or promise is called a
consideration for the promise.”

Consideration, if we analyse this definition, may be:
(1) An act, i.e., doing of something. In this sense consideration is in an affi rmative form.
Example. A promises B to guarantee payment of price of the goods which B sells on credit to C.
Here selling of goods by B to C is consideration for A’s promise.
The act must not however be one which one is under a legal duty to perform. This point has been
Explained later in this Unit.
(2) An abstinence or forbearance, i.e., abstaining or refraining from doing something. In this sense
consideration is in a negative form.
Examples. (a) A promises B not to file a suit against him if he pays him ` 500. The abstinence of A

is the consideration for B’s payment.

(b) L filed a suit against T, his tenant, for possession of premises and arrears of rent. The suit was
decreed in his favour. In execution, L obtained an order for attachment of movable property of T.
In consideration of T agreeing not to appeal against the decree L allowed him one month’s time
to pay the balance of decretal amount and vacate the premises. Held, the agreement was valid
[Gousmohoddin v. Appasahib A.I.R. (1976) Knt. 90].

The act or abstinence which forms the consideration may be a past, present or future one.
(3) A return promise.

Example. A agrees to sell his horse to B for ` 10,000. Here B’s promise to pay the sum of
` 10,000 is the consideration for A’s promise to sell the horse, and A’s promise to sell the horse is
the consideration for B’s promise to pay the sum of ` 10,000.

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