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

Under the Indian Contract Act, 1872, what is the general legal status of an agreement made without consideration, unless it falls within a statutory exception?

An agreement without consideration is void under Section 25, unless it falls within a listed exception such as a registered written promise out of natural love and affection, a promise to compensate, or a promise to pay a time-barred debt. It is not voidable.

  1. AVoidCorrect
  2. BVoidable at the option of the promisee
  3. CValid but enforceable only in writing
  4. DValid but enforceable only by the promisor

Explanation

Section 25 states that an agreement made without consideration is void unless it fits one of the listed exceptions. It is not merely voidable, because voidable agreements are enforceable at the option of one party. Illustration (a) gives the example of a bare promise to give Rs. 1,000, which is void.

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