Contract Act, 1872 - Consideration
Consideration is the amount paid to receive the advantage under a contract. As a general rule there cannot be a contract without consideration. Even if there is consideration it should be lawful. There are certain rules laid down under contract act and all these rules must be fulfilled by consideration.
Section 2(d) of the Indian Contract Act 1872 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 form doing something, such act or abstinence or promise is called a consideration for the promise”.
ESSENTIALS FOR A VALID CONSIDERATION
STRANGER TO A CONTRACT CAN NOT SUE
A Contract Creates Jus in Personam (Right against a person). So the general rule is that Contract can not provide any right or liability to any stranger or to the person who is not the party to the contract. However there are certain exceptions to this rule.
CONTRACT WITHOUT CONSIDERATION IS VOID
Consideration is important for a contract to be valid even if it is inadequate it must exist in an agreement to make it a valid Contract. As general rule a contract without consideration as void. However there are certain exceptions where a contract without consideration shall valid.
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