What is the consideration in a contract?

Something bargained for and received by a promisor from a promisee. Common types of consideration include real or personal property, a return promise, some act, or a forbearance. Consideration or a valid substitute is required to have a contract.

What is consideration in law with example?

Anything of value promised by one party to the other when making a contract can be treated as “consideration”: for example, if A signs a contract to buy a car from B for $5,000, A’s consideration is the $5,000, and B’s consideration is the car.

What do mean by consideration?

careful thought
1 : careful thought : deliberation Give my idea some serious consideration. 2 : thoughtfulness for other people. 3 : something that needs to be thought over carefully before deciding or acting. 4 : a payment made in return for something.

What is consideration in contract law PDF?

consideration. An act, forbearance, or promise by one party to a contract that constitutes the price for which he buys the promise of the other. INTRODUCTION. Another essential ingredient for the formation of a contract is consideration. Consideration is what a promisor demands as the price for his promise.

How many types of consideration are there?

According to Section 2(d) of the Indian Contract Act 1872, there are three kinds of Consideration, viz Past, Present and Future Consideration.

What are the principles of consideration?

Principles of consideration

  • That consideration is the price paid for promisor’s promise;
  • That the person who wants to enforce the promise must be the one who has paid for it – either the promisee or someone acting on their behalf;
  • That the consideration does not have to be paid to the promisor.

What are rules of consideration?

Consideration in contract law is simply the exchange of one thing of value for another. It is one of the six elements that must be present for a contract to be enforceable. Consideration must be both legally sufficient and bargained-for by the receiving party.

What is consideration under Indian Contract Act, 1872?

According to section 2(d) of the Indian Contract Act “when at the desire of the promisor, 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.”