“An agreement without consideration is void”. Do you agree? Justify your response on the basis on what you have learnt about this rule and its exceptions. Use suitable illustrations to substantiate your answer.
A legally binding contract needs consideration as it is an important element. So, a valid contract will not exist without consideration. By promise someone sacrifices or gives something and other people take something. This kind of giving or taking and sacrificing is called consideration by law. If one party promises without any consideration that is a gift. Consideration is an essential element for the formation of a contract. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. S2 (d) Contract Act 1950 defines consideration, 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. It can also be defined as a detriment suffered in exchange for a benefit received, each party must promise to give or do something for the other. Consideration must exist in every contracts and it must have monetary value. There have been a number of case law definitions of consideration, for example Currie v Misa (1875): “A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” S26 Contract Act 1950 states that, an agreement made without consideration is void, unless (a) it is in writing and registered; it is expressed in writing and registered under the law (if any) for the time being in force for the registration of such documents, and is made on account of natural love and affection between parties...
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