WHAT IS CONSIDERATION

WHAT IS CONSIDERATION?

Consideration is the price agreed to be paid by the promisee for the obligation of the promisor. The word consideration was described in a very popular English case of Misa v. Currie as:

“A valuable consideration in the sense of law may consist either in some right, interest, profit or benefit accruing to one party (i.e. promisor) or forbearance, detriment, loss or responsibility given, suuered or undertaken by the other (i.e., the promisee).”
Section 2(d) defines consideration as follows:

“When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or abstain from doing something, such an act or abstinence or promise is called consideration for the promise”.
Analysis of Definition of Consideration
(1) Consideration is an act- doing something.

Example- Ajay promises Bhuvan to guarantee payment of price of the goods which Bhuvan wanted to sell on one month credit to Chaitanya. Here selling of goods on credit by Bhuvan to Chaitanya is consideration for A’s promise. 

(2) Consideration is abstinence- abstain from doing something.

Example- Abhishek promises Bharti not to file a suit against him if he (Bharti) would pay him (Abhishek) Rs. 1,00,000. Here abstinence on the part of Abhishek would constitute consideration against Bharti’s payment of Rs. 1,00,000 in favor of Abhishek.
(3) Consideration must be at the desire of the promisor.

(4) Consideration may move from promisee or any other person.

(5) Consideration may be past, present or future.

Thus from above it can be concluded that:
            Consideration = Promise / Performance that parties                                                          exchange with each other.
Form of consideration = Some benefit, right or profit to one party / some detriment, loss, or forbearance to the other.