No considerations and No contracts

An agreement made without consideration is void unless it is expressed in writing and registered under the law for the time being in force for the registration of documents and is made on account if natural love and affection between the parties standing in near relation to each other.

Essential: Agreement must be in writing and registered. An oral arrangement or unregistered agreement though in writing will not be valid even though it proceeds from natural love and affection and even if the parties to it are near relations to each other. It must be both in writing and registered.

Agreements must be for natural love and affection:

What is natural love and affection? A man makes an agreement with a prostitute and maintains that he has done so on account of natural love and affection. Even though this agreement is registered, it would be void as there cannot be natural love and affection for a prostitute and the consideration is immoral, Natural love and affection may exist between husband and wife, father and son or daughter, brother and sister etc. It would include parties related by blood or marriage.

However, where a husband to get rid of his wife promised to give her a separate flat for residential purposes and in the agreement stated that on account of frequent quarrels he decided to give his wife the flat, it was held that the promise to make the gift was not made on account of natural love and affection and as such section 25(1) would not be attracted.

Where an agreement has been arrived at between certain members of the family that is designed to promote peace and goodwill among certain of its members, this, by itself is a good consideration to support the transaction.

Parties to the agreement must stand in near relation to each other:

Illustration

A for natural love and affection, promises to give his son B Rs 1,000. A puts his promise to B in writing and registers it. His is a contract.

Promise to compensate for past voluntary services:

An agreement without consideration is void unless it is a promise to compensate wholly or in part, a person who has already and voluntarily done something for the promisor, or something which the promisor was legally compellable to do.

Illustrations:

1. A finds B’s purse and gives it to him. B promises to give A Rs 50/- This is a contract.
2. A supports B’s infant son, B promises to pay A’s expenses in so doing. This is a contract.

Essentials: (1) There must be a promise to reward for past voluntary services. Services must have been rendered voluntarily. (2) Act done must be for the promisor or something which the promisor was legally compellable to do (3)The promisor must be in existence when the act was done. Act done by a promoter before the formation of a company is not done for the company (4) The promisor must be compete to contract at the time when the act is done. Act done by a minor promisor will not fall under the exception.

Promise to pay a time barred debt:

An agreement made without consideration is void unless it is a promise made in writing and signed by person to be charged therewith, or by his agent generally or specially authorized on that behalf to pay wholly or in part a debt of which the creditor might have enforced payment but for the law of limitation of suits. A debt barred by law of limitations cannot be recovered. A written and signed promise by the debtor or his authorized agent would make it valid and enforceable promise even though made without any fresh considerations.

Illustration:

A owes B Rs 1000/- but the debt is barred by the Limitations Act. A signs a written promise to pay B Rs 500/- on account of debt. This is a contract.

Essentials:

(1) A debt must be an ascertained and specific sum of money.
(2) A promise to pay a time barred debt must be made in writing and signed by the person charged therewith.
(3) A promise to pay a time barred debt must be an express promise to pay and not merely an unconditional acknowledgement or an implied promise to pay. Thus, where A writes to B: “I am willing to renew the promissory note, come and see me” and A fails to renew the promissory note. It is not an express promise to pay and therefore B cannot succeed.
(4) A debt should be such that the only bar in its recovery is limitation, but otherwise the debt should be perfectly lawful and binding on the debtor.
(5) The document must be signed. It must contain an express promise to pay a debt or must express an intention which would be constructed as an express promise.
(6) A person making the promise should be the person against whom the liability might have been imposed. A promise made by a person who is under no obligation to pay debt of another, even though it is a time barred, is not covered by this exception. A promise therefore, to pay a time-barred debt of a third person is not covered by this exception.

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