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Unit 1: Laws of Contract

According to PHS policy, if an individual is unsure if an incident falls within the defi nition Notes

of scientific misconduct, he or she may call the Research Integrity Officer to discuss the
situation informally.
Source: ultrasonics.bioen.illinois.edu/admin/upload/Case%20study_SZ.doc
1.5 Consideration

One of the essential elements of a valid contract is that it must be supported by consideration. In
simple terms consideration is what a promisor demands as the price for his promise. The term
consideration is used in the sense of quid pro quo, i.e., “something in return”. This something or
consideration need not be in terms of money. This “something” may even be some benefi t, right,
interest or profit accruing to one party, or some forbearance, detriment, loss or responsibility given,

suffered or undertaken by the other party. Also a promise by one party may be consideration for
the promise of other party. Thus, a person who makes a promise to do something usually does so
as a return of equivalent of some loss, damage or inconvenience that may have been occasioned
to the other party in respect of the promise. The benefit so received, or the loss, damage or

inconvenience so caused is regarded, in law, as the consideration for the promise.

Section 2 (d) defines consideration as: “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”.

The object of the consideration should not be
1. Forbidden by law
2. Defeat the provision of law
3. Injurious to person or property

4. Agreement injurious to public policy
5. Agreement opposed to public policy ( section 23)

Example: A agrees to sell his motorcycle to B for ` 20,000. Here B’s promise to pay the
sum of ` 20,000 is the consideration for A’s promise to deliver the motorcycle, and A’s promise to
deliver the motorcycle is the consideration for B’s promise to pay ` 20,000.
An agreement without consideration is void (nudum pactum) s.25. However, the following
agreement without consideration is valid agreement.
1. Natural love and affection
2. Compensation for past voluntary services
3. Promise to pay a time based debt
4. Creation of agency does not require consideration

Rules regarding Consideration

The following rules as regards consideration emerge from the definition given in s.2 (d):

1. Consideration must move at the desire of the promisor and therefore an act done by the
promise at the desire of a third party is not a consideration. (Durga Prasad v/s Baldeo)
A building at a market place at the order of the collector was to be made for which the
defendant, a tenant made promise to pay, later refused was held not liable as consideration
is from third party.

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