lecture-05 - LESSON 5: CONSIDERATION Learning Outcomes...

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Learning Outcomes After todays class you should be able to answer the following questions: · The meaning of consideration · The essentials of consideration · The exceptions to the doctrine of consideration Introduction By now you all must have understood the concept and definition of contract and its essentials. Our next topic of study shall be consideration. Consideration constitutes the very foundation of the contract. As you all know that as per section 10 of the Indian Contract Act there must be a consideration for an agreement to become a contract and that consideration must also be lawful. An agreement not supported by consideration is void. Consideration is one of the essential elements of a valid contract (Sec. 10). The fact. of its existence serves to distinguish those promises by which the promisor intends to be legally bound from those which are not” seriously meant. In the words of Blackstone: “A consideration of some sort or other is so necessary to the forming of a contract, that a nudum pactum, or agreement to do or pay something on one side, without any compensation on the other, will not at law support an action; and a man cannot be compelled to perform it. The law supplies no means nor affords any rem-edy to compel the performance of an agreement made without consideration. If I promise a man £ 100 for nothing, he neither doing nor promising anything in return or to compensate me for my money, my promise has no force in law.” Anson said that the offer and acceptance bring the parties together and constitute the outward semblance of a contract but most systems of law require some further evidence of the intention of the parties, which is provided by consideration and form. It may be noted that consideration is a cardinal necessity for the formation of a contract., but no consideraion is necessary for the discharge or modification of a contract. The breach of a gratuitous promise cannot be redressed by legal remedies. It is only when a promise is made in return of ‘something’ from the promisee, that such promise can be enforced by law against the promisor. This ‘something’ in return is the consideration for the promise. In the language of purchase and sale Pollock has observed: “Consideration is the price for which the promise of the other is bought”. Anson said that an offer and acceptance bring the parties together and constitute the outward semblance of a contract. Definition Section 2(d) of the Indian Contract Act defines consideration as follows “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 from doing something, such act or abstinence or promise is called a consideration for the promise. “An analysis of the above definition will show that it consists of the following four components: a)The act or abstinence or promise which forms the consideration for the promise, must be done at the desire
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This note was uploaded on 09/27/2011 for the course BUS 100 taught by Professor Sherry during the Spring '11 term at Faculty of English Commerce Ain Shams University.

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lecture-05 - LESSON 5: CONSIDERATION Learning Outcomes...

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