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Case laws related to consideration in a contract

 Case laws related to consideration in the contract.

In the case of ,Kedarnath v. Gauri Mohamad

Case is based on future consideration.

If a promise is made for a charitable purpose , and the promise is not fulfilled the same is not enforceable as there is no consideration against the promise but in this case,

The party said that they need to construct a town hall and if the defendant could contribute anything as a charity to help the procedure of construction in future would be of great help and the defendant agreed to do the same. But, in future the defendant declined to pay any charity for the construction.The construction of town Hall started on the basis that the charity would be coming and the work started .So, the promise to pay subscription for construction becomes enforcible ,future consideration.

In the case of ,Doraswamy iyer v. A. Ayyar

It is a very similar case as Kedarnath v. Gowri Mohamad as both cases are based on future consideration but in this case subscription was invited when the construction was in progress.

When the promise was given by a party to pay the charity the construction was already in process.

It was held that the action was not induced by the promise to subscribe but was rather independent of it.

The difference between the above case and doraswamy case is that on the basis of future consideration of construction was started while in the second case that construction was already ongoing when the subscription was invited.

In the case of ,Chappel and Co Ltd v.Nestlé Company Limited

This case revolves around adequate consideration.

 NestlĂ© the defendant was giving out music records in exchange of wrappers, 

So, an issue was raised that how can a wrapper be considered as a consideration as wrappers are considered garbage.

Court said that the consideration needs to be there it does not need to be adequate.

Durga Prasad versus Baldeo 

This case talks about consideration at the desire of promisor.

Consideration moving from third person

In the case of, Chinnaya v. Ramayya

Facts of the case - A,old lady granted estate to her daughter the defendant, with the condition that The daughter must pay an annual payment of Rs.653 to A’s brother (old lady’s brother),the plaintiff .

On the same day the defendant made an agreement with the old lady’s brother (Plaintiff). She clearly stated that she would pay the annual payment as directed by her old mother to his uncle .

Later, the defendant refused to pay on the grounds that she is giving him the money but she’s not receiving any consideration against the money ,so ,there is no contract.

The court held that the consideration furnished by the old lady Constitutes sufficient consideration for the plaintiff to sue the defendant on her promise. Held, the brother was entitled to a decree for payment of the annual sum of money.

In a contract , consideration is an essential ingredient .


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