PAST CONSIDERATION
Consideration means something of value that both parties exchange in a contract. Section 2(d) of the Indian Contract Act, 1!" (#the Act$ hereinafter) defines consideration as #%hen, at the desire of the promisor, the the promise or an& other person person has done or abstained abstained from doing, or does or abstains 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. A promise is said to be made for past or moral consideration 'hen the promisors motivation motivation is to repa& a past past benefit that gave rise to a moral but not legal need to repa&. In the e&es of la' past consideration or moral consideration is no consideration. consideration. A contract 'ith no consideration is null and void. hus a promise of this sort 'ould not be legall& enforceable. here are certain exceptions 'hich 'ill be exa mined later. Consideration must be induced b& a promise made b& the promisor. It refers to an act that occurs as the result of a contract. contract . It is a general rule that consideration flo's from the promisee to the promisor, in case of the past consideration the promisee has technicall& not been identified . If A loses a ring 'hich *, voluntaril& recovers for him then A is under no legal obligation to remunerate *. It is onl& out of gratitude that A 'ould feel the need of repa&ing *. A might then go ahead and promise * a pri+e. In this example, the pri+e is a manifestation of a moral dut& and not a legal dut&. he he la' does not recogni+e this. herefore, * cannot approach the court asing relief from non-performance on As part. o'ever, the vie's on this concept are changing. he /nglish la' r evie' committee in 10! suggested scrapping this rule. Contract la' in its nature focusses on the t'o parties 'ho are engaging in the contract. here are provisions in the Indian Contract Act, 1!" 'hich support this vie'point. It does not tae into account the adeuac& of consideration, as long as both the parties are satisfied. It also focusses on the privit& of contract . hus in a situation 'here the promisor wants to wants to recogni+e a past act as consideration and remunerate a fello' person he must have the option. 1 An important exception has been established b& the case of Lampleigh v Brathwait Brathwait 2 in 1"1". In this case, the defendant, 'ho had committed murder, reuested the plaintiff to travel to the ing and as for a pardon on his behalf. behalf. he plaintiff travelled and rode on his his o'n expense and managed managed to get the pardon. he defendant later promised the plaintiff a re'ard of one hundred pounds. he plaintiff brought brought action 1 Avtar Singh, Contract & Specefic Reief, 123 (/astern *oo Compan& 2414) (10! ) 2 4 /5 266
'hen he refused to pa&. 7efendant 'as held liable. he modern exception that flo's from this case is this8 'hen there is a mutual understanding that service rendered at ones reuest 'ould be subseuentl& paid off, the subseuent promise is nothing but a fixation of reasonable compensation for the service. In addition to a reuest, there must also be an implied promise of compensation. his exception is more liel& to arise in a commercial context. It is generall& assumed that services performed 'ould be reasonabl& repaid eventuall&. 9or example, if a mechanic fixes a car he expects to be paid for it subseuentl&: it 'ould be a different case 'here a friend fixes the car. he rule laid b& Lampleigh v Brathwait 4 has been embodied b& the language of Section 2(d). he section tals about #has done or abstained from doing; #. It clearl& mentions an act 'hich the promisee had done or refrained from doing at the reuest of the promisor. %hen < does something for = 'ithout an immediate promise, it ma& be treated as consideration for a subseuent promise from = to <. %e should also tae note of >ast ?oluntar& Service. A voluntar& service refers to service performed 'ithout reuest and there is a subseuent promise to repa& (out of gratitude or a moral dut&). hus if A had promised * a pri+e in India he 'ould have been liable to pa& him. he situation is different in India because of Section 26(2). It states that all contracts 'ithout considerations are null except 'hen; #A promise, to compensate, 'holl& or in part, a person 'ho has alread& voluntaril& done something for the promisor.$ hus a promise to pa& bac a service rendered 'ithout reuest is a la'ful contract. he concept of past consideration stems from an old established principle of /nglish la' 'hich believes that promise must be @coextensive 'ith the consideration. 6 hus contracts 'ith past consideration are null except in cases described above. his rule, ho'ever, is not follo'ed in India due to specification given in Section 26(2).
3 The Yale Law Jornal, ?ol. 20, o. ! (Ba&,1024), pp. 44-41 4 !" 2 5 (132) .*. 23