Consideration

Consideration is one of the essential elements of a valid contract under Indian law. Section 2(d) of the Indian Contract Act, 1872 defines consideration as: "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 act or abstinence or promise is called a consideration for the promise."

Indian law differs from English law in significant aspects: (1) Consideration may proceed from the promisee or any other person (privity of consideration not required); (2) Past consideration is valid if done at the promisor's desire; (3) Section 25 provides exceptions where agreements without consideration are valid - natural love and affection, compensation for past voluntary services, and time-barred debt acknowledgment.

Consideration must be real though not necessarily adequate. Courts do not assess the adequacy of consideration as parties are free to make their own bargain. However, inadequacy may be evidence of fraud or undue influence. Consideration must be lawful under Section 23 - not forbidden by law, not fraudulent, not injurious to person or property, and not immoral or opposed to public policy.