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IAI Actuarial Core Principles · Business Management · Sources of Indian law and valid contracts

Rakesh asks Sunita, a freelance actuarial tutor in Chennai, to coach his son. At Rakesh's request Sunita first prepares a full set of practice notes, and only afterwards does Rakesh promise to pay Rs 5,000 for them. Rakesh later refuses to pay. Which statement best describes the position in Indian law?

Sunita can enforce the promise. Under Indian law, consideration may be past if the act was performed at the promisor's request, so notes prepared at Rakesh's desire support his later promise to pay Rs 5,000, unlike under strict English law.

  1. AThere is no consideration because the notes were prepared before the promise was made
  2. BThe notes can be consideration, because Indian law allows an act done at the promisor's desire to support a later promiseCorrect
  3. CConsideration must always be present or future, so past acts never count in India
  4. DThe promise is enforceable only if Sunita registers it
  5. The promise is void because the amount of payment was not fixed before the work started

Explanation

Section 2(d) refers to something done 'has done or abstained from doing', so Indian law recognises past consideration if the act was done at the promisor's desire. Sunita acted at Rakesh's request, so his later promise is supported. English law's rejection of past consideration does not apply.

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