When an agreement without consideration is valid?

Agreements without consideration are generally not valid contracts in contract law. However, there are some exceptions where such agreements might be enforceable:

1- Promises in writing based on natural love and affection (close family):

In some jurisdictions, promises between close family members made in writing and registered can be valid even without consideration. This is because the law recognizes the existence of a natural love and affection that can act as a substitute for consideration. For example, a father promising a written gift of a car to his son might be enforceable.

2- Part payment of a time-barred debt:

If you owe someone money but the legal timeframe to collect it has passed (barred by statute of limitations), a new written promise to repay part of the debt can be considered valid consideration. This is because your new promise revives the old debt.

3- Compensation for Past Voluntary Services:

An agreement to compensate for past voluntary services is valid if the service was rendered voluntarily, at the request of the promisor, and if the promisor was competent to contract at the time the service was rendered. For example, if someone voluntarily helps to save another person’s property from being damaged, a subsequent promise to compensate for those efforts is valid.

4- Agency:

An agreement creating an agency does not require consideration. For example, appointing someone as your agent to carry out specific tasks on your behalf can be done without consideration.

5- Completed Gifts:

Once a gift is completed, it is considered valid and cannot be revoked due to lack of consideration. For example, if someone gifts a car to another person and the transfer of ownership is completed, the giver cannot later claim the gift is invalid because there was no consideration.

6- Charitable Subscriptions:

Promises made to a charity, particularly when the charity relies on the promise and acts upon it, can be enforceable even without consideration. For example, a pledge to donate a specific amount to a charitable organization can be enforceable if the organization takes action based on that pledge.

These exceptions recognize specific circumstances under which the general requirement for consideration in contract law can be set aside, allowing certain agreements to be valid and enforceable despite the lack of consideration.

Books Recommended:      Check it Out

1. Beatsen (ed.)-Anson’s Law of Contract : (27th Ed. 1998)

2. Anson-Law of Contract (1998), Universal, Delhi

3. Pollock and Mulla-Indian Contract Act

4. Avtar Singh-Law of Contract, Eastern Book Co.(Lucknow)

5. S.K.Kapoor- Samvidha Vidhi (Hindi)