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

Ravi sells goods to Sunil on credit and delivers them. Later, Tarun, without any request to Ravi to forbear and without receiving anything, promises to pay for the goods if Sunil defaults. Ravi gives nothing in return. What is the legal position of Tarun's promise?

Tarun's promise is void. The goods were already delivered before he promised, and he gave no request, benefit or forbearance in return. Under Section 127 and its illustration, such a later guarantee without consideration is void, unlike one supported by a request to forbear suing.

  1. AValid, because a surety need not receive any consideration
  2. BValid, because the goods were delivered to Sunil
  3. CVoid, because it was made without consideration after the goods were deliveredCorrect
  4. DVoidable at Ravi's option

Explanation

A guarantee given afterwards without consideration is void, as in the illustration to Section 127 where C agrees without consideration to pay for goods already delivered. Past delivery to Sunil was not done at Tarun's request or for his promise. Had Tarun asked Ravi to forbear from suing, that forbearance would have been sufficient consideration.

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