Consideration in Contract Law | CLAT Guide with PYQs

📑 On this page

⚡ The short answer

Consideration is the price paid for a promise: an act, a holding back, or a counter-promise, given at the promisor's desire. In India it may come from the promisee or anyone else, it may be past, present or future, and it need not be fair. Without it an agreement is void, unless a recognised exception applies.

🎬 The 30-second story

Aarav's ₹500 "for nothing"

“Zoya, ₹500 for you on Friday. No reason!”

🎉

Aarav

Monday. Nothing is asked in return.

“About that ₹500… bought sneakers.”

👟

Aarav

Friday. The money is gone.

“A promise is a promise. I'm suing!”

⚖️

Zoya

Does she have a case?

“New deal: ₹500 if I proofread your project?”

📝

Zoya

Same money. This time it buys something.

Tara's ruling: The Monday promise is a bare promise: Zoya did, gave up and promised nothing at Aarav's request, so there's no consideration and nothing to sue on. Proofreading he asked for is the price of his second promise. (Whether friends meant legal business is a separate test.)

What is consideration in contract law?

Every contract is a trade: each side's promise is bought by something from the other. That something is consideration, the quid pro quo. The law enforces bargains, not generosity. So ask: what did the promisor get, or the promisee give up, in exchange?

🧮 The formula

When does a promise become enforceable?

🤝

A promise

Aarav: "I'll pay ₹500"

🔁

Something in return

act, abstinence or promise

🙋

At the promisor's desire

he asked for it

📜

Promise with consideration

enforceable, if the other essentials hold

It can be a benefit to the promisor or a detriment to the promisee. It needn't be both, and it needn't be money.

📌 How CLAT words it

Expect: "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing something, or promises to, such act, abstinence or promise is consideration." Box at the desire of the promisor, any other person and abstained. Most wrong options misread one of them.

What counts as consideration?

🧩 At a glance

Three shapes consideration can take

🛠️An act

Doing something: fixing a laptop, returning a lost dog, building a shop.

✋An abstinence

Holding back from something you're legally free to do: quitting smoking, not suing, not opening a rival stall.

🤞A promise

A promise to act or hold back later. Two promises can buy each other, which is how most contracts start.

The value can be tiny or odd: chocolate wrappers the company asked for have counted as part of the price. Giving up an honest claim counts too: Rohan's promise not to sue Kabir can buy Kabir's promise to pay.

🧭 Decision flow

Is there consideration?

❓ Did the promisee, or anyone, do, refrain from or promise something in return?

Yes →

❓ Was it done at the promisor's desire?

Yes →

❓ Is it real: possible, definite, more than an existing legal duty?

No →

Bare promise: void

Yes ↓

❓ Is it lawful?

Yes →

Good consideration: enforceable

No →

Unlawful consideration: void

No →

❓ Does an exception apply (love and affection, past voluntary help, time-barred debt, completed gift)?

Yes →

Binding without consideration

Whose desire, and who must give consideration?

Two different questions, and CLAT loves to blur them. Whose desire? Always the promisor's. Who gives it? In India, the promisee or any other person.

At the desire of the promisor

The ward officer asks Kabir to build a bus shelter outside a row of shops. He does, at his own cost. Later the shopkeepers promise him ₹1,000 a month, then stop paying. Kabir loses: he built it because the officer asked, not the shopkeepers. Unasked help fails too, though an exception may rescue it (below).

From the promisee or any other person

🔗 Who owes whom

Consideration from a third person

Kabir → Zoya: transfers the shop — the consideration
Zoya → Rohan: promises ₹10k a month
Rohan → Zoya: can sue Zoya — though he gave nothing himself

Rohan gave nothing, but Zoya's promise to him was bought by Kabir's transfer. In India that's enough: Rohan is a stranger to the consideration, not to the contract. Had Zoya made him no promise at all, privity would usually shut him out.

⚔️ Side by side

Indian law vs English law on consideration

🇬🇧English law

Stricter

•Must move from the promisee
•Past consideration generally fails
•Paying less needs fresh consideration

🇮🇳Indian law

Wider, by statute

•May move from anyone
•Past acts done on request count
•A promisee can accept less freely

Test	English law	Indian law
Third person pays the price	Promisee can't sue	Promisee can sue
Help given earlier, at request	Usually fails	Good consideration
Creditor accepts ₹7k for a ₹10k debt	Can still claim ₹3k	Debt discharged

If the passage states the English rule, apply the passage.

Can consideration be past, present or future?

🎚️ The scale

When was the price paid?

← Before the promiseAfter the promise →

Past

Done before the promise, at the promisor's request.

e.g. Rohan tutored Meher last term at Kabir's request; now Kabir promises ₹8,000

Present (executed)

Given at the moment the promise is made.

e.g. Zoya pays cash; the shop promises delivery tomorrow

Future (executory)

A promise to act or hold back later.

e.g. "I'll design your logo; pay ₹3,000 on delivery"

All three are good consideration in India, provided the promisor desired it.

Past consideration is where students slip. If Rohan tutored Meher because Kabir asked, that past service is ordinary consideration for Kabir's later promise. If he tutored her on his own, there was no desire, so his only hope is the exception for past voluntary help.

⚠️ "Past consideration is no consideration"

That's the English slogan. An option rejecting a claim only because the service came first is usually wrong under Indian law. Ask: was it at the promisor's desire? If not, was it a voluntary act for him?

Does consideration have to be fair or real?

Fair? No. If Zoya freely sells her ₹80,000 guitar to Rohan for ₹5,000, the deal stands. But gross inadequacy is evidence: if she says she was pressured or tricked, the absurd price helps prove her consent wasn't free. It never voids the deal by itself.

Real? Yes. Something of value, however small, must actually change hands. These four fail:

🧩 At a glance

When consideration isn't real

🌫️Illusory or vague

A son's promise to "stop complaining" or "be nicer". Nothing definite is given up.

🪄Impossible

"I'll pay you if you bring my late grandfather back to life". An impossible act buys nothing.

👮An existing legal duty

A witness already summoned by a court, or a police officer doing their job, can't charge extra for doing it.

🚫Unlawful

Payment to hide a crime or swing a government tender. Unlawful consideration makes the agreement void.

💡 Existing duty: check who it's owed to

Doing only what the law already requires isn't consideration. But promising a third party to do what you already owe someone else can be. Read whose duty it is.

When is a promise binding without consideration?

"No consideration, no contract" is the rule; CLAT 2025 asked it with the word generally, because of these exceptions. The trap is always a missing condition.

Exception	What it needs	Example
Natural love and affection	Written, registered, between near relatives, made out of love	Kabir registers a written promise of ₹2 lakh to his son
Past voluntary help	Someone voluntarily did something for the promisor; he promises to compensate. Can be oral.	Rohan returns Kabir's lost wallet; Kabir then promises ₹500
Time-barred debt	A written, signed promise to pay all or part of it	Aarav signs a note to repay half an old loan
Gift actually made	The gift is complete, not just promised	Zoya can't reclaim the laptop she handed Meher
Agency	No consideration needed to appoint an agent	Rohan sells Kabir's car for free, as his agent

→ scroll to see more

⚠️ Writing and registration are not optional

Love alone won't do. A sister's oral promise to give her brother ₹1 lakh is void; so is a written one never registered. Courts read the document too: an old Calcutta deed reciting a couple's quarrels, not affection, failed.

One more: once a contract exists, the promisee can let the promisor off, wholly or partly, without fresh consideration. A creditor who accepts ₹7,000 in full settlement of ₹10,000 can't sue for the rest.

Which cases shaped consideration in India?

🏪

Landmark case · 1880 · Allahabad High Court

Durga Prasad v Baldeo

📋

What happened

At the request of the district Collector, Durga Prasad spent his own money building a market. Shopkeepers who later occupied shops there signed an agreement to pay him a commission on goods sold, then refused.

❓

The question

Was his spending consideration for the shopkeepers' promise?

🔨

What the court held

No. He built it at the Collector's desire, not theirs, and not voluntarily for them, so the past-help exception failed too.

What CLAT takes from it: Consideration must be given at the desire of the promisor, not a third person.

👵

Landmark case · 1882 · Madras High Court

Chinnaya v Ramayya

📋

What happened

A mother gifted her estate to her daughter on condition that she keep paying an annual sum to the mother's brothers. The daughter agreed with them to pay, then stopped: the brothers had given her nothing.

❓

The question

Can someone who gave no consideration sue on the promise?

🔨

What the court held

Gift and agreement were one transaction; the mother's gift was consideration for the daughter's promise. The brothers could sue.

What CLAT takes from it: In India consideration can move from any other person.

🏛️

Landmark case · 1886 · Calcutta High Court

Kedarnath Bhattacharji v Gorie Mahomed

📋

What happened

Residents pledged money for a town hall in Howrah. Relying on the pledges, the commissioners hired a builder. A subscriber who had pledged ₹100 refused to pay.

❓

The question

Is a pledge to a public cause just a gratuitous promise?

🔨

What the court held

He pledged knowing the commissioners would take on a builder's bill on the strength of it. That liability, incurred at his implied request, was consideration. He had to pay.

What CLAT takes from it: A bare donation pledge is void; one others relied on at the subscriber's desire binds.

How has CLAT asked consideration?

📝 Asked in CLAT 2019 · Q70 What counts as consideration

Principle: When, at the desire of one person, any other person has done or abstained from doing something, such act or abstinence or promise is called a consideration for the promise. Facts: X, the uncle of Y, made a promise to pay him an amount of Rs. 1,00,000/- as reward if Y quits smoking and drinking within one year. Y quit smoking and drinking within six months.

Choose the correct answer.

AConsideration has moved from the side of X.

BConsideration has moved from the side of Y.

CNo consideration has moved from the side of Y.

DQuitting smoking and drinking cannot be a consideration.

Reveal answer + reasoning

Answer: B

Our solution; 2019 has no official key. Y was free to smoke and drink; giving that up at X's desire is an abstinence, the consideration for X's promise. The facts echo Hamer v Sidway, a famous American case.

Why the others fail

A — X's promise is what is being bought; the price comes from Y.
C — ignores that the principle expressly counts an abstinence.
D — the trap: it needn't benefit X. Giving up a legal freedom is enough.

📝 Asked in CLAT 2025 · Q69 No consideration

… Void agreements are fundamentally invalid making them unenforceable by default… However, in the case of voidable contract, the agreement is initially enforceable but it is later on denied at the option of either of the parties due to various reasons… A void agreement is void ab initio making it impossible to rectify any defects in it while voidable contracts can be rectified.

An agreement made without consideration is generally:

AValid agreement

BEnforceable agreement

CVoid agreement

DVoidable agreement

Reveal answer + reasoning

Answer: C

No consideration means nothing to enforce from the start: the passage's void. Generally leaves room for the exceptions.

Why the others fail

A — valid needs every essential, and consideration is one.
B — enforceable is the very thing a bare promise is not.
D — voidable is about unfree consent; nobody here holds an option to cancel.

💥 Myth vs fact

Myth vs fact

🙅 Myth

Consideration has to be money.

Tap to bust it →

✅ Fact

An act, an abstinence or a promise all count. Quitting smoking can buy ₹1 lakh.

🙅 Myth

The consideration must match the promise in value.

Tap to bust it →

✅ Fact

It need not be adequate. A wildly cheap price only matters as evidence of unfree consent.

🙅 Myth

Only someone who gave consideration can sue.

Tap to bust it →

✅ Fact

In India it can come from any other person, as in Chinnaya v Ramayya.

🙅 Myth

Past consideration is no consideration.

Tap to bust it →

✅ Fact

In India a past act done at the promisor's desire is good consideration; unrequested past help may fall in an exception.

🎯 Quick quiz

Spot the consideration: 5 quick fact patterns

0 / 5

Zoya freely sells her ₹80,000 guitar to Rohan for ₹5,000, then sues to cancel over the low price.

Q1. Will she succeed?

Kabir transfers his shop to Zoya on condition she pays her uncle Rohan ₹10,000 a month. Zoya signs a promise to Rohan, then stops.

Q2. Can Rohan sue Zoya?

At the ward officer's request Kabir builds a bus shelter. Nearby shopkeepers later promise him ₹1,000 a month, then stop.

Q3. Is their promise enforceable?

Aarav's ₹20,000 debt to Rohan is time-barred. Over coffee he says, "I'll pay you back." He doesn't.

Q4. Can Rohan enforce this promise?

Meher's aunt, out of love, signs a written promise to pay Meher's college fees. It's never registered. She backs out.

Q5. Is the promise binding?

Find the consideration in 15 more passages

Timed Contracts drills on the real CLAT exam screen, with a full solution for every option.

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🎯 In a nutshell

Consideration = an act, abstinence or promise given at the promisor's desire.
In India it may come from the promisee or any other person, and be past, present or future.
It must be real and lawful, but need not be adequate; low price only feeds a free-consent challenge.
No consideration means void, save the exceptions: registered love-and-affection promises, past voluntary help, written time-barred debt promises, completed gifts, agency.
A promisee can let the promisor off or accept less without fresh consideration.

📎 Good to know, not to memorise

Indian Contract Act, 1872: s.2(d) definition; s.23 lawful consideration; s.25 no consideration, void, with exceptions (1)–(3); Explanation 1 completed gifts; Explanation 2 inadequacy; s.63 remission; s.185 agency.
Durga Prasad v Baldeo (1880) ILR 3 All 221; Chinnaya v Ramayya (1882) ILR 4 Mad 137; Kedarnath Bhattacharji v Gorie Mahomed (1886) ILR 14 Cal 64; Rajlukhy Dabee v Bhootnath Mookerjee (1900, Calcutta).
English contrasts: Collins v Godefroy (1831), public duty; Chappell v Nestlé (1959), wrappers; Hamer v Sidway (1891, New York).

Frequently asked questions

What is consideration in simple words?

It's what you get in return for your promise. If Aarav promises ₹500 and Zoya proofreads his project because he asked, her work is the consideration. It can be an act, holding back, or a promise, given because the promisor wanted it.

Is an agreement without consideration void or voidable?

Void. Nobody holds an option to cancel; there was never anything to enforce. Exceptions: a registered written promise out of love between near relatives, compensating past voluntary help, a written signed promise to pay a time-barred debt, and completed gifts.

Can a person who gave no consideration sue in India?

Yes, if the promise was made to them. Consideration may move from the promisee or anyone else, so an uncle can enforce a niece's promise bought by her mother's gift. Suing on a contract you aren't party to at all is a privity problem.

Does consideration have to be equal in value?

No. An ₹80,000 guitar sold freely for ₹5,000 is a binding sale. But a shockingly low price is evidence a court weighs when the seller claims coercion, fraud or undue influence.

Is past consideration valid in India?

Yes, if the past act was done at the promisor's desire. Unrequested help isn't consideration, but a later promise to compensate someone who voluntarily did something for the promisor still binds under an exception, even orally.