Consideration

Section 2(d) defines consideration: 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 abstain from doing, something — that act, abstinence or promise is called consideration for the promise. In everyday terms, consideration is "something in return" — the price for which the other party's promise is bought.

Essentials of valid consideration:

• It must move at the desire of the promisor — an act done voluntarily, without such a request, is not consideration.
• It may move from the promisee, or from any other person — Indian law (unlike English law) does not require consideration to move only from the promisee.
• It may be past, present, or future — a promise for a past act, a promise supported by an act done simultaneously, or a promise for a future act, are all valid consideration under Indian law.
• It need not be adequate — the law does not require consideration to be equal in value to the promise, only that it must be real and of some value in the eyes of law; adequacy is left to the parties' own bargain.
• It must be real, and not illusory, illegal, impossible, or uncertain. …