Legal Rules of Consideration

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  • Topic: Law, Contract, Consideration
  • Pages : 4 (1345 words )
  • Download(s) : 278
  • Published : October 11, 2012
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Legal rules as to consideration:
1) Consideration must move at the desire of the promisor: the act done or loss suffered by the promise must have been done or suffered at the desire or request of the promisor. The act done at the desire of a third party or without the desire of the promisor cannot be a good consideration. It is not necessary that the promisor himself should be benefited by the acts of the promise. The benefit may be intended for a third party. But the desire or request of the promisor is essential. Example: A sees B’s house on fire and helps in extinguishing it. B did not ask for A’s help. A cannot demand payment for his service.

2) Consideration may more from the promisee or any other person: consideration can be given or supplied by the promise or any other person who is not a party to the contract. As long as there is a consideration it is not important who has given it. Therefore, a stranger to consideration can sue on a contract provided he is not a stranger to contract. This is known as the “doctrine of constructive consideration”.

3) Consideration may be past, present or future: consideration may be past, present or future. But according to English law, consideration may be present or future but never past.
4) Consideration need not be adequate: consideration need not be adequate to the promise, but it must be of some value in the eye of law. So long as consideration exists, the courts are not concerned as to its adequacy. Provided it is of some value. The adequacy of the consideration is of the parties to consider at the time of making the agreement. However, the inadequacy of the consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given. This is because inadequacy may suggest fraud, mistake or coercion etc.

Example: Ali agrees to sell a car worth $2,000 for $200. Ali’s consent to the agreement was freely given. The agreement...
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