Q. Define consideration and mention its types.

 

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Answer

Consideration is defined under Section 2(d) of the Indian Contract Act, 1872. It is defined as, when the promiseee, at the desire of promisor:

• Has done or abstained from doing something,
• Does or abstains from doing something,
• Promises to do or abstain from doing something,

Then such act, abstinence or promise is called a consideration for the promise.

Pollock defined consideration as, “the price for which the promise of the other is bought, and the promise thus given for value is enforceable”.

In short, the term consideration means ‘something in return’ i.e. ‘QUID PRO QUO’.

 

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Illustrations

a.        A agrees to sell his car to B for Rs. 50,000. Here, B’s promise to pay the sum of Rs. 50,000 is the consideration for A’s promise to sell the car, and A’s promise to sell the car is the consideration for B’s promise to pay the Rs. 50,000.

B.       A promises to maintain B’s child and B promises to pay A Rs. 1,000 yearly for the purpose. Here, the promise of each party is the consideration for the promise of the other party.

 

  

Types of Consideration

Consideration is of following three types and has been categorized as:

1.       Present Consideration: When the promise is performed and consideration is paid simultaneously, it refers to the present consideration.

2.       Past Consideration: When the consideration is given before the promise is made, it refers to as past consideration.

3.       Future Consideration: When the promise is performed but the consideration is paid in future, it is called as a future consideration.

 

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