BUSINESS ADMINISTRATION
BUSINESS LAW
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the promise of a gift is unenforceable.
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the TV is future consideration.
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consideration is unimportant once an agreement is executed.
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the consideration was inadequate.
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Detailed explanation-1: -Example, Peter finds Johns wallet on the road and returns it to him. John is happy to find his lost wallet and promises to pay Peter Rs 2, 000. In this case, too, the no consideration no contract rule does not apply. This contract is a valid contract.
Detailed explanation-2: -(2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless. (a) A promises, for no consideration, to give to B Rs. 1, 000. This is a void agreement.
Detailed explanation-3: -Section 25 of the Act lays down a few exceptions where the contract without consideration is not void. According to Section 25, an agreement made without consideration is void unless: It is the contract in writing and registered. It is for compensating someone for his voluntary services toward the promisor in the past.
Detailed explanation-4: -“An agreement without consideration is void unless it is in writing and registered or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law.”