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CMA Foundation · Fundamentals of Business Laws and Business Communication · Void and Voidable Agreements, No Consideration No Contract

A, for natural love and affection, promises in a registered written document to give Rs. 1,000 to his son B, as in Section 25(1). Which statement best shows why this differs from a stranger's claim to enforce an agreement?

The agreement is a contract because B is the promisee, a party to it, and the promise is written, registered and made out of natural love and affection between near relations. This falls within the exception in Section 25(1) to the no-consideration rule.

  1. AB is a party to the agreement and the promise is within an exception to the no-consideration rule, so it is a contractCorrect
  2. BB is a stranger, but the registration cures this defect
  3. CThe agreement is void because no consideration moved from B
  4. DThe agreement is voidable at B's option because of natural love and affection

Explanation

Section 25(1) makes a promise without consideration a contract if it is written, registered and made out of natural love and affection between near relations. B is the promisee and so a party. The agreement is not void and not merely voidable, and no consideration from B is needed.

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