26 May 2021
hi sir, in contract which consist of single promise and simulatenous performance,for eg... "A" offers reward for anyone who finds his watch he will give 500rupees. "B" comes to know about this and finds the lost watch and return it to "A". in this case "A" is promisor and "B" is promisee. so according to definition of consideration as per 2(d) "when at the desire of promisor, the promisee or any other person has done or abstained from, or does or abstains from or promises to do to to abstain from doing something, such an act, absitenance or promise, is known as consideration for the promise",... so if we look at the last word consideration is for promise.. so in the above example it is "A" who gives promise to "B" so what "A"(promisor) would be receiving would be consideration as per 2(d).. but since "B" has given performance and not any promise so what "B: would be getting i.e.500 would not be consideration as "B: is promisee and not promisor and has not made any promise and hence as per 2(D) what he receives is not consideration.... but if we understand in layman terms about contract, both the parties should receive consideration in return . but "B:" is not receiving any consideration as per 2(D).. so plz could you explain that is money received by "B" is consideration or not and if it is plz expalin
09 July 2024
In the scenario you've described, let's break down the concept of consideration and how it applies to the contract between A and B:
### Understanding Consideration
Consideration, in the context of a contract, refers to something of value (money, goods, services, promises, etc.) exchanged between parties to a contract. It is essential for the validity of a contract because it signifies that each party is giving something and receiving something in return.
### Application to the Example:
1. **Promise and Performance**: - A offers a reward (500 rupees) for the return of his lost watch. This offer is a unilateral contract where A is the promisor (making the promise) and B is the promisee (who has the option to accept the offer by performing).
2. **Consideration Defined (as per Section 2(d) of the Indian Contract Act)**: - Consideration involves a promise, act, abstinence, or forbearance by the promisee (B) or any other person at the desire of the promisor (A).
3. **Analysis**: - **Promise and Performance**: A promises to pay 500 rupees (consideration) if B finds and returns the watch. B, upon finding the watch, performs the act required by the contract. - **Consideration in This Context**: - A's promise of 500 rupees is the consideration he offers to induce B to perform the act of finding and returning the watch. - B's performance (finding and returning the watch) is the consideration B provides in return for A's promise of 500 rupees.
4. **Conclusion**: - Both parties are receiving consideration in this contract: - A receives the benefit of B's performance (finding and returning the watch), which is the consideration given by B. - B receives the benefit of A's promise (500 rupees), which is the consideration given by A.
### Layman's Understanding:
In layman's terms, consideration doesn't necessarily have to be a promise exchanged for a promise. It can be a promise exchanged for an act (performance). In this case: - A's promise of 500 rupees is valid consideration because it induces B to perform the act of finding and returning the watch. - B's act of finding and returning the watch is valid consideration because it fulfills the condition set by A's offer.
Therefore, under Section 2(d) of the Indian Contract Act, both A and B are receiving consideration: - A receives the benefit of B's performance (finding the watch). - B receives the benefit of A's promise (500 rupees).
This mutual exchange of benefit and obligation forms the basis of a valid contract, even though one party (B) is primarily performing an act rather than making a promise.
CAclubindia
