Jurisprudence, Interpretation and General Laws · Contract Law

Consideration and Agreements Without Consideration (Section 25)

Updated 11 October 2026 · Fact-checked

Consideration is the price or return one party gives for the other's promise. Under Section 25, an agreement without consideration is void, unless it is a registered written promise from natural love and affection between near relations, a promise to compensate for past voluntary service, or a signed written promise to pay a time-barred debt.

Understand Consideration and Agreements Without Consideration (Section 25)

A promise is not enforceable just because someone made it. The law asks what the promisee gave in return. That return is consideration. It is the reason a court will make a promise binding. Section 10 says an agreement is a contract only if it is made for a lawful consideration and with a lawful object, among other conditions.

The Act defines consideration in Section 2(d), which is not in the extract supplied here. In plain words, it is something done, abstained from, or promised, at the desire of the promisor, by the promisee or any other person. The rules that follow from it are these. It must be at the promisor's desire. It can be past, present or future, as Indian law allows past consideration. It may move from the promisee or from any other person. It need not be adequate, but it must be real and lawful. It must not be something the law forbids.

Section 25 opens with the general rule: an agreement made without consideration is void. Illustration (a) shows it: A promises, for no consideration, to give B ₹1,000. That is a void agreement. Then it lists three exceptions. In each of them, the agreement is a contract even without consideration.

The first exception is a promise made on account of natural love and affection between parties standing in a near relation. It must be in writing and registered. The second is 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 compellable to do. The third is a promise, in writing and signed by the person to be charged or his authorised agent, to pay wholly or in part a debt the creditor could have enforced but for the law of limitation.

Explanation 2 deals with inadequacy. If the promisor's consent was freely given, the agreement is not void merely because the consideration is inadequate. But the court may consider the inadequacy when deciding whether consent was free. Explanation 1 protects a gift actually made, as between donor and donee.

Privity of contract means only the parties to a contract can sue on it. A stranger to the contract cannot enforce it. A stranger to the consideration, however, can still sue if he is a party to the contract, because consideration may move from any person. Privity is a general common-law rule taught with this topic. It has recognised exceptions, such as a beneficiary under a family arrangement or trust. Section 127 shows how consideration works in guarantee: anything done or promised for the benefit of the principal debtor may be sufficient consideration for the surety.

Key rules to remember

General rule (Section 25): Agreement without consideration = void; Subject to the three exceptions in Section 25. Illustration (a): a bare promise to give ₹1,000 is void.
Exception 1: natural love and affection: Writing + registration + near relation + natural love and affection = contract; All four conditions are needed. An unregistered written promise fails. Illustration (b): a father's registered written promise of ₹1,000 to his son is a contract.
Exception 2: past voluntary service: Promise to compensate for something already voluntarily done for the promisor, or something the promisor was legally compellable to do = contract; The compensation may be whole or part. Writing is not required by the section. Illustration (c): A returns B's purse and B promises A ₹50.
Exception 3: time-barred debt: Written promise + signed by the person to be charged (or his authorised agent) + to pay a debt that was enforceable but for limitation = contract; The promise may be for the whole debt or part of it. Illustration (e): A signs a written promise to pay ₹500 of a barred ₹1,000 debt.
Inadequacy of consideration (Explanation 2): Free consent + inadequate consideration = not void on that ground alone; The court may weigh inadequacy when deciding whether consent was free. Illustration (f) and (g): a horse worth ₹1,000 sold for ₹10.
Gift (Explanation 1): Gift actually made = valid between donor and donee; Section 25 does not disturb a completed gift. A mere promise to gift is still void.
Consideration for guarantee (Section 127): Anything done or promised for the benefit of the principal debtor = sufficient consideration for the surety; Illustration (c): a later guarantee with no fresh consideration is void.

How to solve Consideration and Agreements Without Consideration (Section 25) questions

Use this order for any problem or theory question on consideration and Section 25. It keeps your answer in the ICSI pattern: provision, analysis, conclusion.

1Identify the promise and who made it. Note who gave something in return, if anyone, and whether it was at the promisor's desire.
2Check whether there is consideration. Look at present, past or future acts, promises and abstentions. Ignore adequacy unless consent is in doubt.
3If there is no consideration, state the general rule: the agreement is void under Section 25.
4Test each exception in turn. Ask: is it a registered written promise between near relations from natural love and affection? Is it compensation for past voluntary act? Is it a signed written promise to pay a time-barred debt?
5Check every condition of the exception that fits. Missing writing, registration, signature or near relation defeats it.
6If a stranger is trying to sue, apply privity. Ask whether he is a party to the contract. Consideration may move from another person, but only a party can sue.
7Write a clear conclusion: valid contract or void agreement, with the reason and the section.

Quickest way: Three-question Section 25 check

When to use it: Use it for short case-based questions where you must decide validity in a few lines.

Ask: was something given in return at the promisor's desire? If yes, consideration exists and Section 25 is not needed.
If no, ask which exception fits: family promise (registered writing), past service (compensation), or barred debt (signed writing).
Tick off the conditions of that exception. If any is missing, the agreement is void. Then write the conclusion with the section number.

Common mistakes in Consideration and Agreements Without Consideration (Section 25)

Saying a written promise to a son or wife is valid without registration.
Students remember natural love and affection but forget the registration condition.
Fix: Write all conditions: writing, registration, near relation, natural love and affection. If registration is missing, the promise is void.
Treating the past-service exception as covering any past favour.
The word 'past' makes students ignore the word 'voluntarily' and the promisor's benefit.
Fix: The act must have been done for the promisor and voluntarily, or be something the promisor was legally compellable to do. The later promise must be to compensate for it.
Saying an oral promise to pay a time-barred debt is binding.
Students focus on the debt being a moral obligation.
Fix: The promise must be in writing and signed by the person to be charged or his authorised agent. Without that, it is void.
Saying a contract fails because consideration is inadequate.
Students confuse 'adequate' with 'real'.
Fix: Under Explanation 2, inadequacy alone does not make the agreement void if consent was free. The court may consider it when deciding whether consent was free.
Confusing a stranger to the consideration with a stranger to the contract.
Both are called strangers and the two rules are learned together.
Fix: Consideration may move from any person, so a stranger to the consideration can sue if he is a party. A stranger to the contract cannot sue, subject to recognised exceptions.
Calling a completed gift void for want of consideration.
Students apply the general rule without reading Explanation 1.
Fix: A gift actually made is valid between donor and donee. Only a bare promise to give is void.

Worked examples

Example 1

Ramesh, a resident of Pune, promises in writing to give his daughter Meera ₹5,00,000 on her marriage, out of natural love and affection. The document is signed but not registered. Meera later sues to recover the amount. Decide.

Show the solution

Provision: under Section 25, an agreement without consideration is void unless an exception applies. Meera gave no consideration.
Check the first exception: a written promise, registered, made on account of natural love and affection between parties standing in a near relation.
Facts: father and daughter are near relations, the promise is written and based on natural love and affection.
Gap: the document is not registered. Registration is an essential condition of the exception.
Therefore the exception fails and the general rule applies. The promise is void.

Answer: Meera cannot recover the ₹5,00,000. The promise is an agreement without consideration, and because it was not registered it falls outside the natural love and affection exception in Section 25(1). It is void. If it had been registered, it would have been a contract, as in Illustration (b).

Example 2

Anil owes Sunita ₹80,000. The debt became barred by limitation. Anil writes and signs a letter promising to pay ₹30,000 on account of the debt. Sunita later asks for the ₹30,000. Is Anil bound? Would your answer change if Anil had only promised orally?

Show the solution

Provision: Section 25 makes an agreement without consideration void, unless an exception applies. Anil's promise has no fresh consideration.
Check the third exception: a promise in writing, signed by the person to be charged, to pay wholly or in part a debt which the creditor could have enforced but for the law of limitation.
Facts: the debt was one Sunita could once have enforced and is now barred. The promise is in writing and signed by Anil. It is for part of the debt, which the section allows.
Therefore the agreement is a contract under Section 25(3). Illustration (e) is similar: a signed written promise to pay ₹500 of a barred ₹1,000 debt is a contract.
Oral variant: without writing and signature, the exception does not apply. The promise is void for want of consideration.

Answer: Anil is bound to pay ₹30,000 because his signed written promise to pay part of a time-barred debt is a contract under Section 25(3). Sunita can enforce only the ₹30,000 he promised. If Anil had promised only orally, the promise would be void.

Exam tips

For a theory question, list the general rule first, then the three exceptions with their conditions. Quote Section 25 and the illustrations by letter.
For a case question, test each condition of the exception against the facts. Say clearly which condition is present and which is missing.
Mention Explanation 2 whenever the facts show a low price or a one-sided bargain. State that inadequacy alone does not make an agreement void.
Write privity as a separate short point. Say who can sue and why, and mention that exceptions exist.
Always end with a one-line conclusion: valid contract or void agreement, with the section.

Practice questions from Contract Law

Consideration and Agreements Without Consideration (Section 25) in other exams

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

Consideration and Agreements Without Consideration (Section 25): frequently asked questions

Is an agreement without consideration always void under Section 25?

No. It is void unless it fits one of the three exceptions in the section. These are a registered written promise from natural love and affection between near relations, a promise to compensate for past voluntary service, and a signed written promise to pay a time-barred debt.

How is a promise to pay a time-barred debt valid without consideration?

Section 25(3) says so. The promise must be in writing and signed by the person to be charged or his authorised agent. It may cover the whole debt or part of it, and the debt must be one the creditor could have enforced but for limitation.

Does consideration have to be adequate?

No. Under Explanation 2, an agreement made with free consent is not void merely because the consideration is inadequate. The court may take inadequacy into account when deciding whether consent was freely given.

What is privity of contract?

It means only the parties to a contract can enforce it or be bound by it. A stranger to the contract cannot sue on it. There are recognised exceptions, so mention them when the question asks for a full discussion.