CONSIDERATION 1 SECTION 2d OF THE CONTRACT When

CONSIDERATION 1

SECTION 2(d) OF THE CONTRACT “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 to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise” 2

consideration Some right interest profit To support the promise To one party 3

Section 26 of the Contract Act provides that as a general rule, an agreement without consideration is void 4

Types of consideration Executed consideration Executory consideration Past consideration • Wholly performed on one side immediately the contract is entered into • Is a promise to confer a benefit or to suffer some detriment at some future time. • If the act done was at desire of the promisor, then such act would constitute consideration. 5

Rules of Consideration must be real Consideration need not be adequate Past consideration is good consideration Consideration need not move from the promisee 6

Consideration must be real Glasbrook Bros V Glamorgan Collins Ward V V Godefroy Byham 7

Glasbrook Bros V Glamorgan The manager of a colliery requested police protection during a strike and asked that police be billeted on the premises. The police arranged for this to be done and thus gave more secure police protection than applies generally throughout the area When sued for the cost by the police authority, the colliery owners refuse to pay on the ground that the police were under a public duty to give police-protection. Held: That police had done more than they were bound to do and that special protection was sufficient consideration in support of the contract 8

Consideration need not be adequate Chappell & Co Ltd V Nestle Co Ltd. Phang Swee Kim V Beh I Hock 9

Past consideration is good consideration KEPONG PROSPECTING LTD & ORS V SCHMIDT 10

Consideration need not move from the promisee Venkata Chinnaya v Verikataramaya A sister agreed to pay an annuity of Rs 653 to her brothers who provided no consideration for the promise. But on the same day their mother had given the sister some land, stipulating that she must pay the annuity to her brothers. Held: She was liable to pay the annuity. There was good consideration for the promise even though it did not move from her brothers. 11

S 26: AN AGREEMENT MADE WITHOUT CONSIDERATION an agreement made without consideration is void 26(a) unless 26(b) 26(c) 12

Tan Soh Sim, Chan Law Keong & Ors v Tan Saw Keow & Ors S 26(a) An agreement made without consideration is void unless It is in writing Registered under the law (if any) Made on account of natural love Affection between parties standing in a near relation to each other 13

Kepong Prospecting Ltd & Ors v Schmidt S 26(b) An agreement made without consideration is void unless It is a promise to compensate A person who has already voluntarily done something for the promisor OR Something which the promisor was legally compellable to do 14

Made in writing S 26(c) A promise to pay a debt barred by limitation law Signed by the person to be charged therewith To pay wholly or in part a debt of which the creditor might have enforce payment but for the law for the limitation of suits 15