The Doctrine of Consideration- Section 2(d) talks about the doctrine of consideration i.e. it allows one individual to freely form a contract. It’s based on the Latin phrase “Quid pro quo” which can be understood as “a favor for a favor”, so it can be interpreted from this that this principle indeed plays a very important role in knowing the actual willingness of the parties involved in an agreement to make it a legally binding contract. The consideration can be considered lawful if the following points are satisfied-
- Consideration must be lawful i.e. all the terms that are mentioned in the contract should be lawful and should be made without coercion, fraud, or misrepresentation.
- Consideration must be given by the promisor only and any other third party to the contract cannot consider the promisee on the promisor’s behalf unless otherwise agreed.
- The consideration to the promise can also be given by the third party in some cases, like in cases of family. This was held in the case of Chinaya vs. Ramayya.
- Consideration should be real i.e. consideration to do impossible things or consideration for unlawful nature are not valid in the eyes of law.
The line “has done or abstained from doing, or does or abstains from doing; or promises to do or to abstain from doing,” that is there in the definition of consideration under section 2(d) of the Indian Contract Act highlights that consideration may be made out of somethings that are done or not done in the past or present or promised to be done in future and not done in future.