Is Consideration Necessary For Contract?

An agreement between two or more parties which is enforceable by law is contract. Parties involve in the contract form a legal relationship to perform their task and if one of the party having the intention of fraud then this contract will become voidable. A contract is valid only when the object and the acts are legal Contract is also based on the offer and acceptance between parties. When one party is offering to perform any task and other party is accepting that offer then it becomes contract. According to section10 of Indian Contract Act, 1872 it stat that...

"All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared toq be void. Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents."

CONSIDERATION IN CONTRACT:

Consideration is the price for which the promise of the other is bought and the promise thus given for value is enforceable. Consideration is of three types one is past consideration, present consideration and future consideration. According to section 2(d) of Indian Contract Act, 1872 Consideration is When, at the desire of the promisor, the promise 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.

Elements of a consideration:

1.      There must be bargaining between parties in terms of exchange.

2.      There must be mutual exchange (both parties must get something from the contract).

3.      The exchange must have some value.

 IS CONSIDERATION NECESSARY FOR CONTRACT?

Consideration is the important component of contract the concept of consideration brings the evidence of bargaining for exchange as the intention to be legally bound. According to section 10 of Indian Contract Act, 1872, to become a contract consideration is mandatory element for an agreement. If there is no consideration in agreement then it will not become contract but on the other side section 25 of Indian Contract Act, 1872 says that agreement without considerations are void but there are certain exceptions to it –

“An agreement made without consideration is void, unless –

(1) it is expressed in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless

(2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless

(3) it is a promise, made in writing and signed by the person to be charged therewith or by his agent generally or specially authorised in that behalf, to pay wholly or in part debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract.