Consideration is the cornerstone of any valid contract under Section 2(d) of the Indian Contract Act, 1872. In legal terms, consideration refers to something of value that is given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances. It can be an act, abstinence, or promise — done in the past, present, or promised for the future.

To elaborate, consideration must satisfy the following essentials:

1. It must move at the desire of the promisor: Any act or abstinence must be done at the request of the person making the promise.


2. It may move from the promisee or any other person: Indian law recognises that even a third party can furnish the consideration.
3. It may be past, present, or future: Past consideration (something done before the promise was made) is also valid in India.
4. It must be something of value in the eyes of law: It need not be monetary; even a promise to do or not do something can constitute valid consideration.



However, it must not be unlawful, immoral, or opposed to public policy. For instance, agreeing to pay money for committing an illegal act cannot be considered lawful consideration.

In essence, without consideration, a promise is a mere gift — not enforceable by law. Only when both parties bring something of legal value to the table does the contract become binding and enforceable.

Consideration is defined as:
“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.”

Key Elements:
Something of Value: Consideration can be an act, abstinence (refraining from an act), or a promise to do or not do something.
At the Desire of the Promisor: The act or promise must be performed at the promisor’s request.
From the Promisee or Any Other Person: Consideration can come from the promisee or a third party, unlike English law, which requires it to move from the promisee.
Mutual Obligation: Consideration involves a quid pro quo, where each party gives or promises something in exchange for the other’s promise or act.
Essential Features of Consideration
Must Be Lawful (Section 23):
Consideration must not be illegal, immoral, or opposed to public policy. For example, a contract to commit a crime is void due to unlawful consideration.
Case Law: Gherulal Parakh v. Mahadeodas Maiya (1959) – The Supreme Court held that a contract for wagering was void as its consideration was against public policy.
Must Be Real and Not Illusory:
Consideration must have some value in the eyes of the law, though it need not be adequate. An illusory or vague promise (e.g., “I’ll do my best”) is not valid consideration.
Case Law: Chidambara Iyer v. P.S. Renga Iyer (1966) – The Court upheld that even a nominal consideration (e.g., Re. 1) is valid if it reflects the parties’ intent, emphasizing that adequacy is not a requirement.
Can Be Past, Present, or Future:
Past Consideration: An act already done voluntarily at the promisor’s desire (e.g., rendering services before a formal contract). Valid in Indian law, unlike English law.
Example: In Sindha Shri Ganpatsingh v. Abraham (1895), past services provided at the employer’s request were held as valid consideration for a subsequent promise of payment.
Present Consideration: An act or promise simultaneous with the contract (e.g., payment for goods delivered).
Future Consideration: A promise to perform an act or abstain in the future (e.g., a promise to pay for services to be rendered).
Need Not Be Adequate (Explanation 2 to Section 25):
The law does not require consideration to be of equal value to the promise, as long as it is something of value agreed upon by the parties.
Case Law: Debi Radha Rani v. Ram Dass (1941) – A contract to sell property at a lower price was upheld, as the court does not assess the adequacy of consideration, only its existence.
Exceptions Where No Consideration Is Required (Section 25):
A contract without consideration is void unless it falls under specific exceptions:
Natural Love and Affection: A written and registered agreement based on love and affection between near relatives (e.g., a gift deed between family members).
Case Law: Rajlukhy Dabee v. Bhootnath Mookerjee (1900) – An agreement lacking genuine affection was held void.
Past Voluntary Service: Compensation promised for services voluntarily rendered in the past.
Time-Barred Debt: A written, signed promise to pay a debt barred by limitation.
What Constitutes Valid Consideration
Acts or Services: Performing or promising to perform an act (e.g., delivering goods, providing services).
Abstinence: Refraining from an act (e.g., not suing someone in exchange for a settlement).
Promises: A promise to do or abstain from doing something (e.g., promising to pay for future services).
Money or Property: Payment or transfer of property as part of the exchange.
Third-Party Consideration: Unlike English law, Indian law allows consideration to move from a third party, broadening the scope of valid contracts.
Case Law: Chinnaya v. Ramayya (1882) – A mother gifted property to her daughter with a condition to pay an annuity to the plaintiff (the mother’s brother). The Court upheld the contract, as the consideration (property gift) moved from a third party (the mother).
Critical Analysis
Strengths:
Broad Scope: The Indian Contract Act’s definition of consideration is inclusive, allowing past consideration and third-party consideration, making it more flexible than English law.
Focus on Consent: By not requiring adequacy, the law respects the parties’ freedom to contract, as long as the consideration is lawful and real.
Exceptions: Section 25’s exceptions ensure fairness in cases of natural affection or voluntary services, aligning with Indian social values.
Weaknesses:
Potential for Exploitation: The acceptance of inadequate consideration can lead to unfair contracts, especially in unequal bargaining scenarios (e.g., between employers and vulnerable employees).
Ambiguity in Past Consideration: The validity of past consideration can be contentious if the promisor’s desire is not clearly established, leading to disputes.
Public Policy Challenges: Determining what constitutes “opposed to public policy” under Section 23 can be subjective, as seen in cases involving moral or cultural nuances.
Judicial Interpretations
Kedar Nath v. Gorie Mohamed (1886): A subscription promise for a public cause (building a town hall) was enforceable once work began, as the act of starting construction was valid consideration, illustrating the practical application of promises as consideration.
Durga Prasad v. Baldeo (1880): The Court held that consideration must be at the promisor’s desire. Work done for a third party without the promisor’s request was not valid consideration, emphasizing the requirement of mutual intent.

as per thes sec 2d of contract after acceptance the oferer and acceptance as to perform their consideration if anyone fail then will amount to breach of contact.

as an act, abstinence, or promise made by the promisee or any other person, at the desire of the promisor.
This act, abstinence, or promise is the return or value for the performance of the contract. Essentially, it's the benefit or return exchanged in a contract.

As per section 2(d) of Indian contract act, 1872 defines consideration as an amount or something of value in return of something. It is an act, abstinence, or promise made by the promisee or any other person, at the desire of the promisor.
This act, abstinence, or promise is the return or value for the performance of the contract. Essentially, it's the benefit or return exchanged in a contract.

Consideration is one of the essential elements of a valid contract in contract law. Without consideration, a contract (except in a few exceptions) is not enforceable.
Definition of Consideration : Under Section 2(d) of the Indian Contract Act, 1872, consideration is defined as:
- "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 abstain from doing something, such act or abstinence or promise is called a consideration for the promise .
Key Elements of Consideration
1. At the Desire of the Promisor :The act or abstinence must be done at the request of the promisor. If it is done voluntarily or at a third party’s request, it is not valid consideration.
Case: Durga Prasad v. Baldeo – the construction of shops by the plaintiff was not at the request of the defendant, so it was not valid consideration.
2. By the Promisee or Any Other Person :In Indian law, consideration may move from the promisee or any third party.
This is different from English law, where consideration must move from the promisee only.
Case: Chinnaya v. Ramaya – a third party provided consideration, but the contract was still valid.
3. Past, Present, or Future :Indian law recognizes all three types of consideration:
Past Consideration: Already done before the promise is made.Valid if it was done at the request of the promisor.
Present Consideration: Done simultaneously with the promise.
Future Consideration: A promise to do or not do something in the future.
4. Something of Value : Consideration must have some value in the eyes of the law.
It can be monetary, a service, forbearance, or even refraining from an act.
It need not be adequate, but it must be real and lawful.