Section 25 of Indian Contract Act, 1872
Agreement void, if made without consideration
Agreement without consideration, 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
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 of natural love and affection between parties standing in a near relation to each other; or unless
- 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
- It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
In any of these cases, such an agreement is a contract.
Explanation 1 : Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made.
Explanation 2 : An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.
(a) A promises, for no consideration, to give to B Rs. 1,000. This is a void agreement.
(b) A, for natural love and affection, promises to give his son, B, Rs. 1,000. A puts his promise to B into writing and registers it . This is a contract.
(c) A finds B’s purse and gives it to him. B promises to give A Rs. 50. This is a contract.
(d) A supports B’s infant son. B promises to pay A’s expenses in so doing. This is a contract.
(e)A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs written promise to pay B Rs. 500 on account of the debt. This is a contract.
(f)A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A’ s consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration.
(g)A agrees to sell horse of worth Rs. 1,000 for Rs. 10. A denies that his consent to the agreement was freely given. The inadequacy of the consideration is a fact which the court should take into account into considering whether or not A’ s consent was freely given.