“An services should have been rendered voluntarily.
“An agreement made without consideration is void.
“With reference to provisions of the Indian Contract Act, 1872 examine the validity of the statement and explain the cases in which the statement does not apply. (November 2005) Answer Validity of an Agreement without consideration: The general rule is that an agreement made without consideration is void (Section 25). In every valid contract consideration is very important.
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A contract may only be enforceable when an adequate consideration is there. However, the Indian Contract Act, 1872 contains certain exceptions to this rule.In the following cases, the agreement though made without consideration, will be valid and enforceable.
1. Natural Love and Affection: A written and registered agreement based on Natural Love and Affection between the parties standing in near relation (e. g. , husband and wife) to each other is enforceable even without consideration. A contract in writing, registered on account of natural love and affection between parties standing near relation to each other are the essential requirements for valid contract though it is without consideration. (Rajlukhee Devee vs.
Bhootnath). . Compensation for past voluntary services: A promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, is enforceable under (Section 25(2). In order that a promise to pay for the past voluntary services is binding, the following essential factors must exist: (i) the services should have been rendered voluntarily. (ii) the services must have been rendered for the promisor. (iii) the promisor must be in existence at the time when services were rendered.
(iv) the Promisor must have intended to compensate to the promisee. 3.Promise to pay time barred debt: Where a promise in writing signed by the person making it or by his authorized agent, is made to pay a debt barred by limitation it is valid without consideration Section 25(3). 4.
Agency: According to Section 185 of the Indian Contract Act, 1872 no consideration is necessary to create an agency. s 5. Completed gift: In case of completed gifts, the rule no consideration no contract does not apply.
Explanation (1) to Section 25 of the Act states “Nothing in this section shall affect the validity as between the donor and donee, of any gift actually made. ” Thus, gifts do not require any consideration.