LawContract Lawbasic

Consideration

/kənˌsɪdəˈreɪʃən/

Contract Law Term

Images

CC-licensed · free to use

Video

Definition

Something of value given in exchange for a promise. Must move at the desire of the promisor. Section 2(d) ICA 1872.

Jurisdiction: International

Etymology

Latin: consideratio 'examination', from considerare 'to observe closely'. In contract law, the basis of valid agreement.

Examples

In a sale of land, the buyer's payment is consideration for the seller's promise to transfer, and vice versa — each party provides consideration.

A promise to pay Rs. 10,000 if a person stops smoking is enforceable — abstention from smoking is valid consideration (forbearance).

Case Study

In Chinnaya v. Ramayya (1882), the Madras High Court held that consideration need not move from the promisee in India — a grandmother transferred property to her daughter who promised to pay the plaintiff an annuity. The court enforced the promise even though the plaintiff (a third party) provided no consideration.

Key Cases

Durga Prasad v. Baldeo

1880

(1880) ILR 3 All 221

Defined 'consideration at the desire of the promisor.' Consideration given voluntarily or at the desire of a third party (not the promisor) does not support a promise. Foundational Indian authority on valid consideration.

View on Indian Kanoon →

Also Known As

quid pro quo

Synonyms

quid pro quovaluable considerationpricebenefit

Antonyms / Opposites

gratuitous promisegift

Related Terms

contractoffer and acceptancevoid agreementSection 2(d) Contract Actpromissory estoppel

Dictionary Entry

← Back to Law Dictionary