All Agreements Made Without Consideration Are Void
Explanation 1: Nothing in this section affects the validity of a gift actually made between the donor and the donor. The reason contracts require the exchange of an item of value is to distinguish a legal agreement from a generous gift or promise made by one party to another, none of which is legally enforceable. For example, your friend mows your lawn without asking for anything, it does not count as a contract, because you have not promised a counterpart. If your friend promises to mow your lawn, but they don`t, you can`t bring an action for damages. While an agreement may seem unfair a posteriori, the court will generally not decide whether the value of the consideration is proportionate. The exception is when the discrepancy is such that it constitutes bad faith. In this case, the Tribunal may find that the contract is inexorable because the party who offered consideration of a much lower value acted unfairly. Example: Venkatswamy (vs) Rangaswamy (1903): Facts: By a recorded agreement, « V » promises, due to nature, love and affection for his brother « R » to pay debts to « B ». If « V » does not exonerate guilt. Verdict: « R » can exonerate him and then sue « V » to recover the amount.
It is therefore a valid agreement.2. Compensation for past voluntary service: a promise made without consideration applies when it comes to a person who has already voluntarily done something for the promiser, but without compensation. Simply put, the promise to pay for past voluntary service is binding.3. Promise to pay indebted debts: An agreement to pay a deferred debt is enforceable if the following conditions are met. The inadequacy of the examination is a fact which the Court of Justice should take into account when considering whether A`s agreement was given voluntarily or not. If the services are provided voluntarily, without the wish of the promiser or otherwise than at his request, and the promiser undertakes to compensate the person who provided his services. In such cases, the promise does not need consideration to support it, and the matter falls under section 25 of the Act; Sindha Shri Ganpatsingji v. Abraham aka Vazir Mahomed Akuji, (1895) 20 Bom 755. Explanation 2: an agreement on which the agreement of the promiser is voluntarily granted is not only null and void because the consideration is insufficient; the inadequacy of the consideration may, however, be taken into account by the Court of Justice in determining whether the promiser`s agreement was voluntarily granted. .