Indian contract act, 1872 mentions the required provisions to make a valid contract hitch is enforceable by law. In simpler terms, a valid contract must have an offer communicated to the promisee (the one to whom the offer is initiated to), and the promisee must accept the offer unconditionally, and should communicate the same to the promisor (the one who initiates the offer). Although, an offer and acceptance would only construe it as an agreement which is not enforceable by law. To make an agreement enforceable by law, there must be a consideration made by both the parties to contract. The consideration made by either of the parties to the contract could be beneficial or detrimental in the nature. but the consideration made should be by the desire of the promisor, it could be beneficial to promisor or detrimental to the promise. And so id defined in section 2(d) of the Indian contract act, 1872.
Under the Indian contract act, 1872, section 2(d), consideration is “when at 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 abstain from doing something, such act or abstinence is called consideration for the promise”.
The section talks about the consideration, that is quid pro quo which literally means something in return. Similarly, same concept is also defined in one of the most substantially used Latin maxim called “Ex neudo pacto actio non oritur actio ex” which literally translates to contract without consideration is void, and this legal maxim means no cause of action arises from a bare promise.
Quid pro quo: something in return, that no right of action arises from a contract entered into without consideration, it is one of the most essentials element of the foundation of a contract based on quid pro quo. Such consideration makes both the parties of the contract or agreement to oblige in doing something or abstain from doing something as per the wish or desire of the other.
In gopaldas and others v. Y.J. shamshurhri and others. The Chennai high court held that, “the maxim is a bare agreement, without consideration where no action arises out of a promise neither attendee with particular solemnity now with any consideration, no legal liability can arise”
In shrinivasa general trader and others v. the state of Andhra Pradesh and others, the supreme court held that “there should be an element of consideration for each service rendered in the sphere of contractual relation”.
In addition to that, the Indian contract act, 1872 also defines a concept of “no consideration” where a contract without any consideration would still be enforceable in the court of law, such a contract without any consideration would be construed as valid and not void. These provisions are an exception to the notion of quid pro quo. This concept of “no consideration is defined in section 25 of Indian contract act, 1872. These exceptions are mentioned hereinafter:
- Natural gifts: the natural gifts given to the close relatives should be given, in writing and should be registered that it is given out of natural love and affection.
- Time barred debt, it should be given in writing
- Compensation for the past voluntary services.
- Completed gifts.
Finally, it is important to highlight that the notion of “consideration” must be included when creating any contract or originating any contractual duty. The absence of regard renders the contact null and void. However, there are several exceptions to the idea of consideration, and a contract with no consideration would still be legal and enforceable in the eyes of the law.
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