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

No Consideration, No Contract and Its Exceptions

Updated 10 October 2026 · Fact-checked

Under the Indian Contract Act, 1872, an agreement without consideration is void. Section 25 gives exceptions where a promise is valid even without consideration: a written and registered promise out of natural love and affection, a promise to compensate past voluntary service, and a written promise to pay a time-barred debt.

Understand No Consideration, No Contract and Its Exceptions

Consideration means something in return. When you promise something, the law usually wants the other side to give or promise something back. A bare promise, with nothing in return, is just a gift of words. The law does not enforce it.

This is the general rule in Section 25: an agreement made without consideration is void. So if Ravi says to Mohan, "I will give you ₹10,000 next week," and Mohan gives nothing in return, Mohan cannot sue Ravi.

The same Section 25 then lists exceptions. In these cases the agreement is valid even though there is no consideration. The exam almost always asks you to identify these exceptions and their conditions.

Section 25 itself lists three exceptions:

Natural love and affection (Section 25(1)): the agreement must be in writing, registered under the law for registration of documents, and made between parties standing in a near relation to each other.
Past voluntary service (Section 25(2)): a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something the promisor was legally compelled to do.
Time-barred debt (Section 25(3)): a written promise, signed by the debtor or his authorised agent, to pay wholly or in part a debt which the creditor could have enforced but for the law of limitation.

Two related points are often mentioned with these, but they are not among the three exceptions listed in Section 25. A completed gift needs no consideration, as Explanation 1 to Section 25 says. An agency contract needs no consideration, as Section 185 says. Treat them as supporting points, and focus first on the three Section 25 exceptions.

Key formulas to remember

General rule: Agreement without consideration = void; Section 25 opens with this rule. It applies unless an exception is met.
Exception 1: natural love and affection (Section 25(1)): Valid if: in writing + registered + near relations + natural love and affection as the reason; All four conditions must be met. Missing any one makes the agreement void.
Exception 2: past voluntary service (Section 25(2)): Valid if: promise to compensate a person who has already voluntarily done something for the promisor; The service must have been done voluntarily for the promisor. The promise may be for the whole or part of the compensation. The same sub-section also covers something the promisor was legally compelled to do.
Exception 3: time-barred debt (Section 25(3)): Valid if: written + signed by debtor or authorised agent + promise to pay a debt the creditor could have enforced but for limitation; The promise may be for the whole debt or a part. An oral promise does not qualify.
Related point: completed gift (Explanation 1 to Section 25): Completed gift = no consideration needed; This is not one of the three Section 25 exceptions. It applies to a gift already made. A mere promise to give a gift in future is not enforceable. Agency needs no consideration under Section 185.

How to solve No Consideration, No Contract and Its Exceptions questions

Use this method for any question on whether an agreement without consideration is valid.

1Check whether any consideration exists. If something was given or promised in return, the exception is not needed.
2If there is no consideration, start with the rule: the agreement is void under Section 25.
3Look for the Section 25 exception that matches the facts: family relation and affection, past service, or old debt.
4Test every condition of that exception. For love and affection, check writing, registration and near relation.
5For past service, check that the person voluntarily did something for the promisor (or something the promisor was legally compelled to do), and that the promisor now promises to compensate.
6For a time-barred debt, check that the promise is written and signed, and that the debt was one the creditor could have enforced but for limitation.
7State the conclusion clearly as valid or void, with the reason in one line.

Quickest way: Three-word scan: Love, Service, Debt

When to use it: Use this when an MCQ describes a promise with no return benefit and asks if it is enforceable.

Find the keywords: relatives, gift, past help or old loan.
Match them to the exception: Love, Service or Debt.
Look for the trap words: oral, unregistered, not signed, stranger.
If a required condition is missing, mark void. If all are present, mark valid.
Eliminate options that say valid because the promise was serious or because the amount was small.

Common mistakes in No Consideration, No Contract and Its Exceptions

Saying a promise to a relative is valid without registration.
Students focus on the family bond and forget the formal conditions.
Fix: Remember that love and affection needs writing and registration, and the parties must be near relations.
Treating an oral promise to pay a time-barred debt as valid.
Students think the debtor's honesty is enough.
Fix: The promise must be in writing and signed by the debtor or his authorised agent.
Applying the past service exception where the act was not done voluntarily for the promisor, or was done for someone else.
The word voluntary is skipped while reading the facts.
Fix: Check that the person voluntarily did something for the promisor (or something the promisor was legally compelled to do), and that the promisor then promises to compensate.
Confusing a promise to give a gift with a completed gift.
Both use the word gift.
Fix: A completed gift needs no consideration. A mere promise to give later, with no consideration and no exception met, is void.
Calling the agreement voidable instead of void.
Students mix up the terms from other chapters.
Fix: Section 25 says an agreement without consideration is void, not voidable.

Worked examples

Example 1

Suresh, out of natural love and affection, promises in writing to give his brother Mahesh ₹2,00,000. The document is not registered. Mahesh sues. Is the promise enforceable?

Show the solution

There is no consideration from Mahesh, so the general rule says the agreement is void.
Check the love and affection exception. The parties are brothers, so they are near relations.
The promise is in writing and made out of natural love and affection.
The document is not registered, so one required condition is missing.
The exception fails, so the general rule applies.

Answer: The promise is not enforceable. It is void because it lacks consideration and is not registered, so the exception does not apply.

Example 2

Dev borrowed ₹50,000 from Anita. This was a valid debt, but it later became time-barred. Dev then signs a written promise to Anita to pay her ₹30,000 towards the old debt. Can Anita enforce it?

Show the solution

Dev's new promise has no fresh consideration, so the general rule would make it void.
Check the time-barred debt exception. The loan was a valid debt lawfully due from Dev to Anita, and it became barred only later by limitation. So it is a debt Anita could have enforced but for limitation.
Dev's promise is made to Anita, the creditor. It is in writing and signed by Dev, the debtor.
The promise is to pay a part of the debt, and a part is allowed.
All conditions are met.

Answer: Yes, Anita can enforce the promise for ₹30,000. It is valid under the Section 25 exception for a written, signed promise to pay a time-barred debt.

Exam tips

Expect scenario MCQs asking whether an agreement is valid or void. Read for the missing condition.
Watch for keywords such as oral, unregistered, unsigned. They usually signal the trap.
Learn the three exceptions as a list and the conditions of each, since options often swap them.
If an option says the promise is valid because the promisor promised seriously, eliminate it.
With no negative marking, always attempt the question and choose the best match after elimination.

Practice questions from Consideration and Legality of Object

No Consideration, No Contract and Its Exceptions: frequently asked questions

What is the general rule on consideration in Section 25?

An agreement made without consideration is void. This is the starting point for any question on the topic. The exceptions are valid only if their conditions are met.

Must a love and affection promise be registered?

Yes. It must be in writing, registered, and made between parties standing in a near relation to each other out of natural love and affection. If any condition is missing, the agreement is void.

Does a promise to pay a time-barred debt need to be in writing?

Yes. It must be in writing and signed by the debtor or his authorised agent. An oral promise does not make the old debt enforceable under this exception.

What is the difference between past voluntary service and past consideration?

Under Section 25, a promise to compensate a past voluntary service is valid without fresh consideration. In other situations, past acts alone are generally not treated as consideration for a later promise. Read whether the act was voluntary and done for the promisor.