Fundamentals of Business Laws and Business Communication · Consideration and Legality of Object

Meaning and Essentials of Consideration under Section 2(d)

Updated 10 October 2026 · Fact-checked

Consideration is the price or return one party gives for the other party's promise. Under Section 2(d), when at the desire of the promisor the promisee or any other person has done or abstained from doing something, or does or promises to do or abstain, that act, abstinence or promise is consideration. Check desire, a real and lawful act, and who gave it.

Understand Meaning and Essentials of Consideration (Section 2(d))

A contract is not just a promise. It is a promise for which something is given in return. That something is consideration. It is the reason the law enforces the promise.

Section 2(d) of the Indian Contract Act, 1872 says: 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, such act, abstinence or promise is called a consideration for the promise.

Break that into parts. First, the act must be done at the desire of the promisor. Second, it may come from the promisee or any other person. This is why Indian law differs from English law: a stranger to the consideration can still furnish it, though a stranger to the contract generally cannot sue. Third, the act can be a doing, an abstaining, or a promise to do or abstain.

Consideration comes in three time forms. Past consideration was given before the promise was made. Present (executed) consideration is given at the same time as the promise. Future (executory) consideration is a promise to be performed later. The Indian definition covers all three because it uses the words 'has done', 'does' and 'promises to do'.

Example: Ravi asks Meena to paint his shop and she does it. Ravi then promises to pay her ₹5,000. Her painting was done at his desire, so it counts as consideration. If instead Meena paints the shop on her own, without being asked, and Ravi later promises payment, the act was not at his desire. So it is not consideration under Section 2(d). However, a later promise to compensate a person for a voluntary act may still be enforceable under Section 25(2), as an exception to the rule that an agreement without consideration is void. That is a separate rule. It does not make the voluntary act consideration.

Key formulas to remember

Definition of consideration: Consideration = act, abstinence or promise, done at the desire of the promisor, by the promisee or any other person; This is the Section 2(d) definition in short. Every essential below comes from it.
Essentials of valid consideration: At the desire of the promisor + may move from promisee or any other person + may be past, present or future + real + lawful (Section 23) + need not be adequate; Use this as a checklist for any question.
Types by time: Past = before the promise; Present = along with the promise; Future = promised to be done later; Indian law accepts past consideration if it was given at the promisor's desire.
Adequacy rule: Consideration must have some value in law, but need not be equal to the promise; Courts do not weigh how fair the bargain is. They only check that something of value exists.

How to solve Meaning and Essentials of Consideration (Section 2(d)) questions

Use this method for any fact-based or theory question on consideration.

1Find the promise and the promisor, then the promisee.
2Ask what the other side gave or promised in return.
3Check whether it was done at the desire of the promisor, not voluntarily or on someone else's request.
4Check who gave it. Under Indian law the promisee or any other person is enough.
5Classify it as past, present or future, noting that past is valid only if given at the promisor's desire.
6Check that it is real and lawful. Consideration that is unlawful under Section 23 (for example, illegal or against public policy) fails. Also, doing only what the law already compels you to do as a public duty is not valid consideration, such as a police officer being promised a reward for performing a duty the law already imposes on them.
7Do not reject it just because it looks small. Adequacy is not required.
8State the conclusion: valid consideration exists or it does not.

Quickest way: Three-question filter

When to use it: Use it for MCQs where you have about a minute per question.

Question 1: Was it done at the promisor's desire? If no, there is no consideration.
Question 2: Is it real and lawful? If it is unlawful under Section 23, or it is only a pre-existing public legal duty such as an officer doing what the law already requires, it fails.
Question 3: Is the only objection that it is too small? If yes, ignore it, because adequacy is not needed.
If all three pass, pick the option saying consideration is valid. Eliminate options that demand adequacy or that the promisee must give it.

Common mistakes in Meaning and Essentials of Consideration (Section 2(d))

Saying consideration must be adequate
Students assume a fair price is required.
Fix: Remember that the law needs value, not equal value. A very small price can still be valid consideration.
Saying consideration must move only from the promisee
English law is mixed up with Indian law.
Fix: Under Section 2(d), the words 'or any other person' allow a third party to give it.
Treating all past acts as valid consideration
Students remember that Indian law accepts past consideration but forget the condition.
Fix: The past act must have been done at the promisor's desire. A purely voluntary act without request does not qualify.
Confusing past consideration with a voluntary act
Both happen before the promise.
Fix: Ask one thing: did the promisor request it? If yes, it is past consideration. If no, it is not consideration under Section 2(d), though a later promise to compensate may be enforceable under Section 25(2).
Ignoring that consideration must be real and lawful
Students focus on the presence of an act, not whether the law allows it.
Fix: Consideration must be real and lawful under Section 23. Unlawful consideration makes the agreement void. A pre-existing public legal duty, such as a police officer's duty to protect people, is also not valid consideration for a promised reward.
Mixing up consideration with motive
Both seem to be the reason for a promise.
Fix: Consideration is the legal return given for the promise. Motive such as love or charity is not consideration.

Worked examples

Example 1

Asha asks Bharat to repair her scooter. Bharat repairs it. After two days, Asha promises to pay him ₹800. Is there consideration for Asha's promise under the Indian Contract Act, 1872?

Show the solution

Promisor: Asha. Promisee: Bharat. Promise: to pay ₹800.
Bharat's repair was done before the promise, so it is past consideration.
The repair was done at Asha's request, so it was at the desire of the promisor.
Indian law under Section 2(d) accepts past acts done at the promisor's desire.

Answer: Yes. The repair is valid past consideration because it was done at Asha's desire, so her promise to pay ₹800 is enforceable.

Example 2

Which of the following is correct about consideration under Section 2(d)? (a) It must be adequate to the promise (b) It must move from the promisee only (c) It may move from the promisee or any other person at the desire of the promisor (d) It must always be in cash

Show the solution

Option (a) is wrong. Adequacy is not required.
Option (b) is wrong. The words 'or any other person' allow a third party to give it.
Option (d) is wrong. It may be an act, abstinence or promise, not only cash.
Option (c) matches the Section 2(d) wording.

Answer: Option (c).

Exam tips

Look for the phrase 'at the desire of the promisor'. Many questions are built on whether a past act was requested.
If an option says consideration must be adequate or must come only from the promisee, eliminate it.
For past, present and future, link each to the time of the promise: before, along with, after.
Remember that there is no negative marking, so always mark an answer even when unsure.
Read facts for voluntary acts such as helping without being asked. These usually fail as consideration under Section 2(d).

Practice questions from Consideration and Legality of Object

Meaning and Essentials of Consideration (Section 2(d)) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Meaning and Essentials of Consideration (Section 2(d)): frequently asked questions

What is consideration under Section 2(d)?

It is the act, abstinence or promise done at the desire of the promisor by the promisee or any other person. It is what each party gives in return for the other's promise. Without it, an agreement is generally not enforceable as a contract.

Is past consideration valid in India?

Yes, if the past act was done at the desire of the promisor. The words 'has done or abstained from doing' in Section 2(d) cover it. A past act done voluntarily without request is not consideration, though a later promise to compensate it may be enforceable under Section 25(2).

Must consideration be adequate?

No. It must have some value in the eyes of the law, but it need not match the worth of the promise. Courts do not judge whether the bargain was fair.

Can a stranger provide consideration?

Yes, under Indian law consideration can move from the promisee or any other person, if given at the desire of the promisor. This is different from privity of contract, which concerns who can sue on the contract.