An Agreement Without Consideration is Void

An agreement without consideration is void and also a contract without consideration is void because consideration in a contract is an essential part of the contract. The legal rules of consideration state that it is mandatory to have consideration for a valid contract. 

It is a universal rule that there is no agreement without consideration and without considering the contract is void. In this article, we will discuss, the universal rule that “a contract without consideration is void.” But, there are some exceptions of consideration to this rule.

Before that let’s see the definition of Consideration in contract law.

Definition of Consideration

What is consideration law? The meaning and definition of consideration have been provided under section 2 (d) of the Indian Contract Act, 1872 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 something, such act or abstinence or promise is called a consideration for the promise.”

Here, the word consideration is used in the sense of quid pro quo which means something in return. So, an agreement without consideration is a bare promise. The Latin maxim exnudo pacto non oritio action, which literally means an agreement without consideration is void.

Agreement without Consideration is Void

Section 25 of the Indian Contract Act, 1872 provided that “Agreements without consideration is void unless it is in writing and registered, or is a promise to compensate for something, or is a promise to pay debt time-barred by the limitation law.”

So, all agreements without valid consideration are void but this section 25 provides some exceptions to this rule. These are;

The general rule is that the agreement is void without consideration. But, there are certain exceptions to this rule as per section 25 of the Indian Contract Act, 1872.

Example: A promises B to pay Rs.1,00,000/- if B deliver A’s smuggled goods out of the country. In this example the object of A’s promise is illegal, and the consideration for B’s promise being in part is unlawful.

According to section 24 of the Indian Contract Act, 1872, “If any part of a single consideration for one or more objects, or anyone or any part of any one of several considerations for a single object, is unlawful, and the agreement is void.”

As per section 25 (1) of the Indian Contract Act, an agreement that is made between two individuals who are directly related to each other through blood or are near relations of each other, where the deal is in writing and has been registered formally and which can be enforceable in the court of law.

In other words, if an agreement is made in writing and registered between the two or more parties which are in close blood relation or spouse based on natural love and affection, such an agreement is enforceable in the court of law even when there is no consideration to other parties.

Example: A wants to give his car to B as a gift. B is a grandson to A. Due to love and affection, the agreement is valid in the eye of law even when there is no consideration in return.

In the Case of Vijay Ramraj v/s Vijay Anand, it was held that if the promisor promised to pay some amount of money to his relative during his life died, then the agreement is enforceable. 

In the above case, the agreement is made out of the love and affection as a document of agreement registered also, so the heirs of the deceased person were made liable for the specific performance of a contract.

1. The service was voluntarily done in the past,
2. It was rendered to the promisor,
3. The promisor was in existence when the service was done,
4. The promisor is willing to compensate for the service.

In other words, if a promise has been given to an individual who has been provided service voluntarily, then, in this case, all agreements are enforceable without consideration.

1. A written promise should be signed by a person or his appointed agent.
2. A promise must be there, to pay wholly or partly debt.
3. The debt must have been enforced by the creditor for the limitation of the period.

Example: A owes B Rs. 5000/- And the debt is time-barred by the Limitation Laws. Later, A sign to pay Rs. 5000/-  to B.

At the time of forming the agreement, both the parties should fix a date for repayment of debt which is after the period of limitation, in such cases, the Limitation Act does not acknowledge the debt under section 18 of the Limitation Act.