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Indian Contract Act, 1872

Question No.1

State with reasons whether Y can recover the promised amount from X in each of the following cases:

a) X promised to donate Rs. 10,000 towards the repairs of a temple of Y. X did not pay.
b) X promised to donate Rs. 10,000 towards the repairs of a temple of Y. Y has incurred a
liability on the faith of this promise. X did not pay.
c) X a Hindu husband executed a registered document in favour of Y his wife. Whereby he
promised to pay her Rs. 10,000 per month. Later, X did not pay.
d) X a Hindu husband executed a registered document in favour of Y his wife. Whereby he
promised to pay her Rs. 10,000 per month. After disagreement and quarrels between them,
X refuse to pay.
e) X wrote to Y, “At the risk of your own life, you saved me from a serious motor accident. I
promise to pay you Rs. 1,000”. X did not pay.
f) X, a client promises to pay Y, his advocate Rs. 10,000 in addition to his fees if he succeeds. X
succeeds but refuses to pay Rs. 10,000.
g) X owed to Y Rs. 2,00,000. The debt was barred by the Limitation Act. X signed a written
promise to pay Rs. 2,000 to Y on account of this debt.
h) X gifted Rs. 1,00,000 to Y his neighbour’s wife by executing a registered gift deed without
any consideration. There is no near relation between X and Y.

Answer

a) No. Y cannot recover any amount from X because the agreement is void in the absence of any
valid consideration. As per the provisions of the Indian Contract Act, 1872, for a valid
contract there must be consideration from both the sides.
b) Yes. The agreement is valid as it was supported by consideration in the form of detriment to
Y who had incurred liability on the faith of the promise made by X.
c) Yes. The agreement is valid because the agreement is registered and made on the account of
natural love and affection between X and Y. As per the provisions of the Indian Contract Act,
1872, a written and registered agreement based on natural love and affection between the
parties standing in near relation to each other is enforceable even without consideration.
d) No. The agreement is void as it was not made on the account of natural love and affection. As
per the provisions of the Indian Contract Act, 1872, a written and registered agreement
based on natural love and affection between the parties standing in near relation to each
other is enforceable even without consideration.
e) Yes. The agreement is valid because a promise to compensate for voluntary acts done in the
past is valid even though without consideration. As per the provisions of the Indian Contract
Act, 1872, a promise to compensate wholly or in part a person who has already voluntarily
done something for the promisor is enforceable in the court of law.
f) No. X’s promise to pay the additional sum was without any consideration. The consideration
must be something which the promisor is not already bound to do. Here, Y was bound to

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render the best of his services under the original contract. As per the provisions of the Indian
Contract Act, 1872, the performance of an act by a person who is legally bound to perform
cannot be consideration for a contract.
g) Yes. The agreement was valid because a duly signed written promise to pay Time Barred
Debt is valid even without consideration. As per Limitation Act, 1963, if a debt is not claimed
for a period of 3 years then it cannot be claimed thereafter. But as per the provisions of the
Indian Contract Act, 1872, a promise to pay time barred debt is enforceable. The promise
should be in writing signed by the person making it or by his authorized agent. The promise
may be for the whole or any part of the debt. Thus, a promise to pay a time barred debt is
valid.
h) Yes. The gift is valid. A completed gift needs no consideration and need not be a result of
natural love and affection or near relation. As per the provisions of the Indian Contract Act,
1872, gift does not require consideration. The person giving gift cannot take the same back
from the other party by taking the plea that no consideration has moved from the other
party. It is immaterial whether or not the party stands in near relationship.

Question No.2

X, by a registered deed, gifted certain property to Y, his daughter, with a direction that she should pay
Rs. 10,000 per month to Z, her uncle (X’s brother). On the same day, the daughter entered into an
agreement with her uncle, Z, to pay him Rs. 10,000 per month. Later she refused to pay on the ground
that she did not receive any consideration from her uncle. Adviser her.

Answer

As per the provisions of the Indian Contract Act, 1872, consideration may proceed from the promisee
or any other person who is not a party to a contract. In the leading case law of Chinnaya vs Ramayya,
an old lady (promisee), by deed of gift, transferred a certain property to her daughter on the
condition that her daughter required to pay a certain sum to old lady’s sister. On the same day, the
daughter executed an agreement in favour her old lady’s sister, promising to a stipulated sum. But
later on, the daughter refused to pay on the ground that no consideration has ever passed from old
lady’s sister. Court held that, the old lady’s sister is entitled to recover the amount. The contract is
backed by the consideration by the old lady.

The fact of the case:

As similar to the above case, X registered a deed, gifted a certain property to his daughter Y but with
a direction that Y should pay Rs. 10,000 per month to her uncle Z (X’s brother and promisee). On the
same day, Y entered into an agreement with her uncle Z to pay him Rs. 10,000 per month. Later on, Y
refused to pay her uncle on the ground that she did not receive any consideration from her uncle Z.

Conclusion:

Z is entitled to recover the amount from Y. It is not necessary that the consideration should come
from the promisee (Z). It may come from any other person and here it has come from X, Z’s brother.
Contract is supported by the consideration from X.

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